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By Michael Angier | |||||
This Number Affects Almost Every Aspect of Your Life | |||||||
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There's a number floating around that governs how much you pay on loans, whether or not you get a loan and even whether or not you get hired for a job. I'm talking about your FICO® Score (Fair, Isaac and Co.). A FICO® Score is a number that tells lenders what kind of borrower you will likely be based upon your credit history. Your score is between 300 and 850, and lenders prefer borrowers with higher scores. Because Dawn and I don't have a need to borrow much and because we always seem to be able to borrow money whenever we need it, we never paid much attention to our credit score. But last December, when we financed our SUV, the credit union told us our score didn't qualify us for their best interest rate. Uh oh. It turns out we had erroneous information in our files with one or more of the three major credit reporting services. And your credit history could, as well. The good news was the report showed we always make our payments on time. The bad news was someone else's unpaid hospital bill was on our report. That and a few other inaccurate listings dropped our FICO® score just enough so we didn't get the best rate. In the whole scheme of things, another half a point on a three-year car loan isn't that big a deal. But what about a half or full point on a home mortgage? That would mean some serious money. Keeping track of your FICO® score is well worth your time and attention. By the end of 2005, you should be able to get your credit report without paying any fees. But until that happens in your area, I highly recommend you find out what your score is and what your credit report contains. We used My FICO® and were very pleased. Not only did we get our current reports from the big three and advice on how to improve our score, we signed up for monthly monitoring (ScoreWatch). This way, any change in our score—up or down—gets reported to us via email. If a credit card balance goes up by a selected amount or if a new account is opened in our name, we're notified. This way, if we become victims of identity theft, we'll know it quickly and be able to minimize its impact.
Action Point Click Here to learn more about your FICO® score. ........................... |
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