Know what information lenders have on you.
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While you’re cleaning up your debt, order copies of your credit reports, which are free, and
your credit scores, which cost about $15, since the information contained in them will
directly affect the interest rates you’re offered on credit cards, mortgages and other loans.
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There are three major credit bureaus: Experian, Equifax and TransUnion.
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Each collects information on your credit history which is culled into a credit
report. From that report, a credit score is derived.
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That score is a quick way for lenders to assess how risky you are as a
potential borrower.
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The higher your score, the less risk you pose to lenders and the more likely
it is that you’ll get their best available rates.
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The score most commonly used by lenders is the FICO score, developed by Fair Isaac.
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When lenders review your credit reports and resultant FICO scores, they take into
account not only how much you owe but also how much credit you have available
to you.
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Too much of either and they may not loan you any more money.
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So when you get your reports, check for inaccuracies; the bureaus are required
to investigate and correct them once you report them.
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Look, too, for things thatmay lower your credit rating, including open
lines of credit you never use or accounts you thought had been closed long ago.
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The bureaus may have different information about your credit history, which
means your credit score can vary somewhat from bureau to bureau.
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So it’s important to view reports from all three.
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You can get any of the bureaus’ credit reports free at www.annualcreditreport.com
and your FICO score from MyFICO.com.
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Then check if this is true:
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If you’ve beenturned down for credit, employment
or housing in the past 60 days, you may receive a free credit report from
all of the three credit bureaus.
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http://money.cnn.com/magazines/moneymag/money101/lesson9/index7.htm
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