[Understanding Your Credit Score] ONE 15
Installment debt demonstrates that you can manage a large loan. How you handle revolving debt tends to carry more weight, because it is seen as a picture of your future behavior. (You can pay off the balance each month or just the minimum; max-out your credit cards or rarely use them.) In light of our present economy, good credit isn’t just nice to have. It is essential if you want to level the playing field with lenders. At one time in the not-too-distant past, a credit score of 720 was enough to get the best loan terms. Even people with lower scores could get decent deals, and at the peak of the lending boom, it seemed that no score was too low. Today, lenders typically demand a minimum score of 740 for the best mortgage rates. Lower scores mean
higher rates or perhaps no loans at all. One of the major drawbacks to credit scoring is that it relies on information in your credit report, which may contain errors. That is why it is extremely important to check your credit reports annually, or at least three to six months before making a major purchase. That will give you sufficient time to correct any errors before a lender checks your score. You cannot get your credit score without paying a fee. However, what is reported on your credit report is what determines your credit score, and you are entitled to see your credit report once a year at no cost from each of the three credit reporting agencies, Equifax, Experian, or TransUnion. To obtain a free credit report, simply go to www.annualcreditreport.com.
If you notice inaccurate information, you can submit a request for removal to one of the three agencies above. Be sure to specify which information is inaccurate and why. Include any documents to support your claim. Ask in writing that the information be corrected or removed from your report. By law, the bureaus must investigate your complaint and give you a response in writing along with a free copy of your report if the information is changed. Your score should reflect that change shortly afterwards. Having a good credit score is important when applying for new credit or loans. The best way to maintain good credit is to pay on time, pay more than the minimum, and monitor your credit report at regular intervals for any inaccurate details.
About the Writer: D. Ray Lewis joined the Board of Retirement in 1983. He became director in 2005 after serving for several years as assistant director.
C h r i s t i a n C o m m u n i t y o f Fa i t h a n d Le a r n i n g M ore tha n 40 major are as of s t u dy i n cl ude : B i b l i c a l S t u di e s, B i o l o g y, B u s i n e s s, En gl ish , H istor y, M in i s tr y, M i s s i o ns, Mus i c, Pre - Law, Pre - N u r s i n g, Ps yc h o l o g y, S p o r t s M a n a ge m e nt, Teach er Ed ucati o n , a n d m a ny m o re. View al l degrees o nl ine. 800-76-FWB B C | w w w. f wb bc. edu | 3 60 6 Wes t E nd Avenu e, N as hv il l e, T N 3 7 2 0 5