Credit Score

What Does Your Credit Report Score Really Mean?

If you don’t know what your credit report score is, you should check as soon as possible. The reason is that having a good credit report score could mean the difference between saving thousands of dollars, getting that good job you want, or getting that loan or credit card you’ve applied for. Not knowing your credit report score could mean that someone has stolen your identity and trashed your credit without your knowledge. How do you check your credit report score? You do it by getting a copy of your credit report.

Free Credit Reports

Every person is entitled to a free copy of their credit report from each of the three credit reporting agencies. The three agencies are Experian, Trans Union and Equifax. You won’t know exactly what your credit report score is unless you get your credit reports from all three agencies. However, if you’re trying to make a purchase, it might pay to contact the lender you’re trying to get credit with to see which agency they report to.

Getting A Line of Credit

When you try to get a line of credit, whether to finance a house or a car, check with the lender to see which credit agency they report to. For example, one company may report to Experian while another may report to Trans Union. If the company reports to Experian, they’re going to look at your credit report score from that agency only. So if you have anything to fix on that report, you’ll want to focus only on that report. Of course, it pays to fix your credit report score on all three reports, but if you’re doing it to get a line of credit, only fixing the report that particular lender looks at should take priority.

Saving Money

By fixing your credit report score, you could potentially save thousands of dollars over time. That’s because you’ll always get the lowest possible interest rates, you’ll get the highest lines of credit and people will just trust you more with their money. By having a high credit report score, you are proving to others that you’re trustworthy, that you always pay off your debts in a timely manner and they will be more than likely to lend you all the money you want. Your credit report score should be very important to you, in other words, so you should do all you can to raise it as soon as you can.

Everyone has to start somewhere. If you have a very low credit score (say, under 350) chances are you haven’t yet established any accounts and don’t have a credit history. Talk to your local lender about its borrowing requirements. When you’re approved for your first loan or credit card, set up a responsible repayment pattern immediately to establish a good credit record.

The Bottom Line

Your credit score is based on a variety of factors and can be used to determine whether you will qualify to borrow money as well as the terms, including the interest rate of the loan. Consistently paying your bills on time and in full will help prevent damage to your credit score in the future.