Consumer Credit Information

Your Credit Score

A credit score is one of several pieces of information a lender uses to decide whether or not you qualify for a loan. If you've ever had a car loan or a credit card, you've had a credit score, even if you didn't know it. Your credit score helps answer the big question in a lender's mind: If I give this person a loan will I get paid back consistently and on time?

Do you have any control over your credit score? You bet you do. Your credit score is a numerical snapshot of your current credit risk picture. When a potential lender looks at your credit score, several things become clear:

    
• How you pay your bills.
    
• How much outstanding debt you have.
    
• How long you've had credit.
    
• The types of credit you've had. And how many times you've applied for or opened new lines of credit recently.

That means, like Santa Claus, your lender can see whether you've been naughty or nice to your creditors.  If you've got a good track record of paying your bills on time and using credit conservatively, your credit score will reflect this.  If you've had delinquencies and late payments, your credit score won't look so good.

    
• But no credit score is forever. You can always take these steps to improve it: Check your credit report every year.
    
• Correct any mistakes you find in your credit report. Don't rely on a so-called “credit-fixer.” Do it yourself. always pay your bills on time.
    
• Keep your balances low. Do not apply for, and open, multiple credit accounts in a short period of time.
    
• Use credit conservatively. If you handle your credit wisely, over time your credit risk picture will improve and so will your credit score.

By the way, don't get too attached to the actual number your lender uses for your credit score. Scoring systems use different numeric scales. So it's hard to say what a good credit score number is. Let's just say that a good credit score is one that helps you get your loan.

One more thing to remember about credit scores. While lenders can look at the way you handle your credit, they do not look at your race, your gender, your religion, where you were born or where you live. With credit scores, everyone gets a fair shake at getting a loan or a new line of credit.