Credit Report

Understanding Your Credit Score

Lending institutions rely on your credit score to determine whether you will be approved for a loan or offered a service, and may determine how much you will pay in interest. Your credit score is a number that reflects your payment history, your credit history, your current debt and many other factors. It can be customized to the company that requests it – for instance, your score at an auto dealer may be somewhat different from the score you get at a mortgage broker.

What your Credit Score Means

The typical credit score ranges from 500 to 850. Generally, the higher the score, the more confidence the organization has that the new debt or payment will be made, and will be made on time. The score is a product of your history. You can control it by how you pay your bills and how you use your credit.

Checking Your Credit Report

You can obtain a free credit report from the Federal Trade Commission or AnnualCreditReport.com.

  • If you want more complete information about your score, click here. You’ll find printable booklets with explanations of credit scoring, what it means to you, and how you can improve it.
  • Check your credit report periodically to check for accuracy and to guard against identity theft. You can get a free credit report every year, one from each of the major credit bureaus.

A Smart Money Tip

Borrow only for those items or assets that hold or appreciate in value, or that last longer than the length of the loan.