Finance & Loans

Your credit score

Your three digit credit score will determine how much a lender is willing to loan you and at what rate. The higher the score, the lower the rate a lender will charge you for your car loan, insurance premium, revolving credit such as credit cards and your mortgage. There are three major credit bureaus that keep tab on your credit: Equifax, Experian and TransUnion. Under the current law, you are entitled to obtain a free credit report a year from each agency. It doesn’t include a credit score what is commonly known as FICO (Fair Isaac Corporation) Score for you and you may have to pay to obtain that.

In calculating your credit score, the above agencies will consider your payment history (35 percent), credit utilization (30 percent), length of credit history (15 percent), credit mix (10 percent) and applying for new credit (10 percent).

In order to obtain a higher score, use approximately half the credit limit on each card, pay the monthly minimum due amount on time, and limit the number of credit lines available to you.

If you see any discrepancy in your credit report, work with the agency as soon as possible to correct the situation.