Check Your Credit Report!

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Mark your calendar to check your credit report—and do it every year. Credit card companies as well as mortgage lenders will rely on the information in your report, therefore your score determines your chances to borrow money—and how favorable your terms will be. This is important if you're thinking about purchasing a home in the near future!

Where to check your credit score

Experian (, Equifax ( and TransUnion (, are the three major credit-reporting agencies. You can request a free credit report every year from each credit bureau to get an idea of where your credit stands.

Credit scores can range anywhere from 200 to over 800. Scores below 620 are considered risky; 720 and above will earn excellent rates and terms.

Determining credit scores:

Your debt payment history is typically 35% of the total score: Late payments and amounts owed are the two areas that are most closely looked at.

Amount owed is about 30% of your score: Large outstanding balances won’t automatically damage your credit. The significant element is the percentage of your total available credit that you use on your credit cards. When you consolidate your card balances onto one credit card, that actually causes your score to go down a bit.

Length of credit history is about 15% of the score: You must have credit to get credit, so there’s no way to improve this part of your score other than time.

New credit is around 10% of the score: Applying for too much new credit in a short period of time is a common mistake.
Type of credit is also around 10% of the score: What is the overall combination of your credit. Things like  mortgages, car loans, credit cards, etc. Scoring companies don’t disclose how accounts when weighted in determining your overall score.


Ways to improve your credit score

Lenders will receive your score and the “reason codes” as determined by the credit scoring companies. Make sure you research these reason codes that are listed. These codes may be the most important factor in improving your overall score. When you get your report in the mail, you'll also want to review the following:

•  Check all the information on your report and make sure it is correct. If it is not, you must immediately notify the credit bureau in writing. Be sure to use certified mail to send them the disputed incorrect entries.  Reporting companies will have up to 30 days from receipt of your dispute to adjust or verify the data.
•  Look for inactive accounts. Close any accounts you don’t use.
•  Check for late payments. You can request that those older than seven years be removed.
•  Verify and update your accounts and account numbers.
•  Verify your social security number and address.