We’ve all seen the television commercials with the catchy jingles that tell you if you don’t check your credit score you will be denied for loans or financing and wind up driving a beat up old car, or living in your parent’s basement, or using a cell phone that was discontinued in 1991. These ads, while meant to be funny, do have some truth behind them. Knowing your credit score is very important information to have if you are looking to make a lifestyle change, like buying a new car or purchasing a home.

Most people don’t know their credit score. While it is easy and free to obtain a credit report, getting a copy of your credit score will cost you. Most people don’t know that their credit score is not included on their credit report, which can account for there being countless companies out there offering services to check and monitor your credit score. These companies claim you can get a “free copy” of your credit score, but what you are really paying for is the credit monitoring services they offer.

Now, this doesn’t mean these companies are bogus. In fact, if you have bad credit and are working to resolve credit issues and bring your score up, then these services can be helpful. A simple Google search for “credit score” will turn up hundreds of websites offering services for you to get credit reports and credit scores. It is noteworthy to mention that you can get your credit report with your credit score from any of the three major credit reporting agencies; Experian, Equifax, and TransUnion, but you will pay a fee for these reports just like any other site offering credit score inquiries.

Flash forward to after you have received your credit score. What do the numbers mean? Basically, a credit score is a number that helps lenders and other institutions “predict” how likely you are to make your credit payments on time and how risky you seem as a borrower. It is important to know that an individual can have up to three different credit scores at any given time, based on the fact that information is gathered and processed through separate databases of all three major credit reporting bureaus.

When lenders take your score into consideration they usually mean the FICO score developed by the Fair Isaac Corporation; it is today’s most commonly used scoring system. Your credit score can range anywhere from 300-850. Most people are in the 600-700 range. When it comes to your credit score, the higher the number the better you appear to lenders. In their eyes, a credit score above 700 is considered very good and a sign of your financial health. Credit scores below about 620 are considered sub-prime and indicate a much higher risk that usually leads lenders to offer you a much higher interest rate than your 700-scored counterpart.

If you don’t know your credit score, it doesn’t hurt to find out. Yes, you have to pay a fee, but if you are looking to buy a car or a home, it’s a number that can help you determine where you stand with lenders. And remember, if you have bad credit, there are always ways to improve your score. If you make timely payments on your existing lines of credit, you can help to rebuild your tarnished record and will become more appealing to lenders in the future.

Author Bio: Dee Jurgens is the head copywriter for CyberLead, inc http://cyberleadinc.com specializing in auto sales leads http://www.carcredit.com delivering quality car loans for ten years http://myfreecreditscorenow.net Providing free credit scores for you and yours free credit score

Category: Finances
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