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Ask The Expert - October 2020

by Stacy Wise | Oct 19, 2020

credit-score-oct20-blog

Have You Checked Your Credit Score Lately?

 

Yes? Well, good for you! No? You might consider it, and here is why. 

 

Your credit score can impact your life in many ways. Below are just a few examples of when your credit score may come into play:


  1. We all need a roof over our head. Whether you choose to rent or buy, a landlord or financial institution will likely pull your credit to see your payment history.
  2. Want a new job? Many employers today pull credit reports on prospective hires.
  3. What isn’t wireless in today’s world? Cell phone and internet providers have been known to review credit histories to determine eligibility.
  4. Insuring your most valuable assets could become difficult or costly if your credit history is not stellar. Most insurance companies pull credit reports as a part of their underwriting process to determine if you are a risk they are willing to take.
  5. Do you like heat, A/C and running water? Many utility providers are now checking consumers’ credit prior to allowing access.
  6. Need to borrow money? One of the major factors for acquiring funds from a financial institution, whether it be for a new car, vacation, child’s braces or college tuition, is a consumer’s credit history and score. The better the score, the cheaper it will be for you to borrow money. The opposite is also true.

 

The gold standard for credit scores is the FICO Score, named for the Fair Isaac Corporation. It weighs five factors to come up with a final score.

 

Payment History - 35%

Amount of Debt - 30%

Length of Credit History - 15%

New Credit - 10%

Credit Mix - 10%

 

Credit scores range from 300-850. Below is a range of scores and description most financial institutions would agree upon.


300-579: Poor
580-669: Fair
670-739: Good
740-799: Great
800-850: Excellent

If you would like to check your credit report, go to annualcreditreport.com.

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