Like it or not,credit matters.
In our Everything you better Know About Credit series, were breaking down the basics.
Your score, on the other hand, is just a snapshot of that report.
Its like a grade.
If your report looks good, youll have a good grademaybe 740 or higher.
If your report is bad, youll have a poor gradeprobably something like 550.
Your score is an indicator of what really matters: your past and present relationship with credit.
We tend to obsess over credit scores because theyre so easy to understand:800 good.
Butas Investopedia explains, its your report that really matters.
Yes, companies can use your score to gauge your creditworthiness or decide to lease you an apartment.
And yes, they might make overall decisions based on that number.
But heres the thing: if your report is good, your score should be good.
They have to request that separately.)
Thankfully, its easy and free to do this!
The official and easiest way to do this is atAnnualCreditReport.com.
They do things their own way.
If its your first time reading a report, its probably daunting.
Creditor Information is the meat of your report and includes all of your existing lines of credit.
Did you neglect a debt and it was turned over to a collections agency?
That info will be included, too.
The responsibility of the account: Is it a joint or individual account?
And then there are Credit Inquiries.
In this section, youll find any people or businesses who have pulled and reviewed your credit report.
There are also soft pulls.
This is when you pull your own credit report or a credit card company pre-approves you for a card.
Soft pulls dont affect your credit.
This is why its crucial to check your report every year.
it’s possible for you to also mail it into Equifax and TransUnion:
Equifax
1-866-238-8067Equifax DisputesP.O.
Box 740256Atlanta, GA 30374-0256Equifax Disputes
TransUnion
1-800-916-8800TransUnion Disputes2 Baldwin Place, P.O.
BOX 1000Chester, PA 19022
Heres a detailed guideweve written for disputing errors.
The Federal Trade Commission offerssample dispute letters, too.
Keep in mind, though,you dont just have one credit score.
You have hundreds of them because there isnt just one credit scoring company.
Plus, different companies use different scoring models depending on what kind of loan youre taking out.
Your mortgage lender might have their own model!
Different scores have different ranges, too.
Some go up to 850; others go up to 990 or higher.
Thats the one lenders are most likely to use,according to LearnVest.
In general, though, your scores should be pretty similar.
Your score is just a number.
Its easier than ever, which is probably why people are obsessed with their scores now.
Chances are, your bank offers a free glimpse at your score every month.
They can also email you if your score changes.
Discover: Discover cardholders get a free copy of their FICO score on their monthly statement.
Theyre known for their free monthly credit score and monitoring.
They use your Experian score.
Quizzle: Quizzle gives you a free copy of your VantageScore credit score and Equifax credit report.
Of course, no credit card is required.
WalletHub: They have their own scoring model based on your TransUnion report.
They also offer a free copy of this report and give you advice on how to improve your credit.
If a credit repair company promises to boost your score by 100 immediately, for example, steer clear.
And I say this as someone with excellent credit.
It hasnt done much more for me than having good credit has.
So gaming it doesnt help anything but your ego.
There are also changes to how medical debt is reported.
The new rule gives consumers or insurers enough time to pay these bills before they go to collections.
The bureaus will also remove medical debts that are paid by insurers after the 180th day.
USA Todayreports:
Using whats known as trended data is the biggest change.
The phrase means credit scores will take into account the trajectory of a borrowers debts on a month-to-month basis.
Those changes are expected to be implemented this fall.
