Related Info

• Budgeting and Saving
• Consumer Help and Tips
• Credit Report and Credit Score
• Dealing with Debt
• Family and Money
• Managing credit card debt
• Smart Shopping Tips
• Credit Counseling and Debt Counseling
• Housing Counseling
• Other Articles
• Helpful Links

Understanding Credit Scores & Credit Reports

When making any kind of credit decision, lenders look at a variety of factors, including your credit scores. A credit score is a snapshot of your credit risk picture at a particular point in time. It changes as new information is added to your credit file and old information drops off.

There are five characteristics that determine how high your credit score will be: payment history, amounts owed (owing a great deal of money on many accounts makes you a higher credit risk), length of credit history (a longer credit history will increase your score), new credit (opening several accounts in a short period of time represents a greater risk to lenders), and your mix of credit (creditors like to see consumers with a combination of installment and revolving loans).

You can obtain your credit score at http://www.myfico.com (in addition, you will receive your Equifax credit report), through Experian at http://www.experian.com or by calling 888-397-3742 (you will also receive your credit report). Trans Union offers a Trans Union credit score with your credit report (http://www.tuc.com or 800-916-8800). Be sure to keep in mind that there is no one score used to make decisions about you.

In addition to finding out your credit score, you’ll also be able to find out the four top reasons why your score isn’t higher. The quickest way to improve your score is to pay any delinquent bills. Keep balances low on credit cards. If you have high balances on your credit cards, make a concentrated effort to pay off the debt by starting with the card closest to the limit. Apply for and open new credit accounts only as needed. Make sure your credit file is accurate. Your credit score will improve over time if you make changes now in the way you handle credit.