Improving your credit score is not only smart, it is imperative for anyone who wants to improve their quality of life. Your credit score is to your financial life what your overall health level is to your real life.
A high credit score adds options, many options that those with a less pristine credit score cannot access: lower interest rates, more available credit, lower insurance rates, better living accommodations and increasingly, additional employment prospects.
2) Derogatory credit items reported;
3) Availability of unused credit;
4) Home loan to total value;
Ironically, income level is not a measure for your credit score.
We’ll address how to improve your credit score by improving the items above separately, but first things first; you need to know your starting score before you can start down the path of improved your financial health.
Checking Your Credit Score
Checking your credit score is simple. Each of the three credit reporting agencies: TransUnion, Experian and Equifax provide a free report once a year. This can be done easily by accessing their combined Annual Credit Report website at: www.annualcreditreport.com. It’s fast, free and easy.
If for whatever reason, you want to write to the credit reporting agencies directly, you can do so by using the addresses below:
P.O. Box 740256
Atlanta, Georgia 30374
P.O. Box 9554
Allen, Texas 75013
P.O. Box 6790
Fullerton, CA 92834
Knowing your credit score today is important, but unfortunately this is not enough. Checking it once a year does not allow you to take corrective action on a regular basis to improve it quickly – using the health analogy above, if you were at risk of a heart attack you would not check your blood pressure once a year, you’d check it regularly – and then take action to manage its improvement. The same holds true for your credit score.
There are many good services that allow you to monitor your credit score regularly. Our favorite is myFico.com. myFico.com is a division of Fair Isaac Corporation (est. 1956) – Fair Isaac Corporation, or “FICO” analytics have become the backbone of the credit monitoring industry, and even today they are the industry standard. It makes sense to go with the gold-standard of credit reporting.
Which ever service you use, it’s important to know and regularly monitor your credit score. Only then can you start down the road to improvement.
Until next time, we wish you good financial health.