Credit & Debt

4 Things You Never Knew About Your Credit Score (But Probably Should)

If you’re in the market for a new home or car, want to rent an apartment or want a job that involves handling money, you probably know that you need to protect your credit score. Your credit score tells creditors how likely you are to pay back a loan, pay your rent or handle money with integrity. Here are some little-known facts about credit scores that may help you retain your high score, or improve a low one.

There are more than three credit bureaus

Most people think of the “Big 3” (Experian, Equifax and Transunion) when they think about credit bureaus. Anyone can check their scores with these three agencies and dispute any discrepancies.

These are important facts, but you should know that there are even more credit reporting agencies than you may think. The credit bureau you need to worry about depends on what you’re trying to accomplish. For example, if you’re renting an apartment, your prospective landlord checks with a tenant agency to see if you’ve had any evictions. He or she may also look at public records of bankruptcy or foreclosure. If you’re trying to open a bank account, bankers look to see if any banks have closed your account within the last five years.

Getting a new cell phone may affect your credit

Anytime a creditor checks your credit, you get dinged a few points. Credit bureaus figure that if you’re filing a lot of credit applications, you’re having some financial or money management problems, both of which make you more likely to default on your loans.

If you obtained a new cell phone in the past year or so, you may have a slightly lower credit score. Cell phone providers usually check customers’ credit before authorizing phone purchases. Many rental car companies will also check your credit, especially if you pay via debit card.

Furniture store credit cards are problematic

If you’ve ever bought furniture on credit using the furniture store’s credit program, you might have torpedoed your credit score. These kinds of loans are considered “loans of last resort,” or loans that people take out when they can’t get credit anyplace else. Credit bureaus may consider you desperate when you use a furniture store credit card, and lower your score accordingly.

Your credit score is important to your future, so you need to be careful with it. Paying bills on time is still the most important aspect of protecting your credit, but you also need to be careful about what you buy and how you buy it. Find out what type of credit lenders are interested in and double-check to make sure that portion of your report is healthy, giving you the best chance of getting the approval you need.

You can get your credit score for free.

Credit bureaus are required to give you a free credit report once a year, but it doesn’t include a score. However, if you’d like to know your credit score, you can get it for free via Credit Karma (http://www.creditkarma.com). Just sign up for an account in order to check your credit score. Credit Karma checks your credit reports and gives you several scores. Its inquiries are considered “soft” inquiries, which don’t count against your credit, so you can check as often as you wish.

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