How to Evaluate My Credit Score

Most likely you’ve heard the ad slogan: “My score is 730, what’s your score?” No, they’re not talking about cholesterol counts or an SAT score. They’re talking about your consumer credit score. A credit score is a point or number value assigned to your credit report that is supposed to represent your credit worth for creditors to use in considering how “risky” you are for a line of credit. The higher the score, the more likely it is that creditors will lend you money and approve your loan applications. Follow these steps to find out if your credit score is where it should be.

Instructions

Difficulty: Easy

1. The credit score point or number values have a range from 300 to 850 points. Higher numbers are better in this ranking system.
2. A credit score that is above 700 points is considered to represent a consumer who is an excellent risk for creditors and lenders. For those is the credit industry, excellent risk means that a consumer is less likely to fail in repaying a debt.
   
3. Credit scores below 675 points are considered to be a bad risk for creditors. Consumers with credit scores below this point value will find getting credit extended to them much more difficult.
4. Credit scores are assigned by the three main credit reporting agencies or bureaus that collect information from suppliers, such as credit card issuers, banks and other lending institutions. They use this information to create consumer credit reports. Credit card companies, banks and lending institutions also assign credit scores based on the information they have on a consumer.
   
5. When you apply for a bank loan or a credit card, the creditor may look at the credit scores assigned by any and all of those you hold credit with when deciding whether you would be a worthwhile risk.
6. Certain debts, such as having high balances on several credit cards can weigh heavily against a consumer's credit score. This could result in lower-than-desired credit scores for consumers.
   
7. Credit scores are calculated using the information from several things, such as your history of making payments, specific loans you hold, and credit problems or judgments made against you.

Tips & Warnings

• If you carry balances on several credit cards, transfer as much of these balances to just one or two credit cards. Then the rest of your credit cards will appear as “repaid” on your credit report. This also keeps your credit score from being lowered due to balances on several cards.
• Keep track of your credit score by obtaining your free yearly credit report.
• Is your credit score not a high as you would like? Consider applying for a prepaid bank card and increase your credit worth and score by completely paying off these balances each month that you make a purchase.
• Don’t make additional requests for copies of your credit report if you can avoid doing so. This is because each request is reflected on your credit report and creditors are wary of consumers that show several requests for credit reports.