Taking Charge of your credit

Take Charge of your Credit

Who knows more about your finances?  You or your automobile salesman?

Gone are the days when a hopeful couple sat across the desk from their local banker anxiously awaiting his decision on their loan application.  Today, the fate of their loan and the rate of their interest hinges on a computer generated number -  their credit score.

What’s the score?

The FICO credit score (named for developers, Fair, Isaac & Company) reflects dozens of parameters in one’s financial history.  For years, this number was a tightly guarded secret. Congress has now secured your right to know your score and take advantage of it!

            Score 700 – 850 –Smooth loan process, best interest rates

            Score 550 – 699 –Medium risk, higher interest rates

            Score 300 – 549—Sorry, no loans or credit cards

Know Your Score

Are you counting on a new car, a new roof, new furniture?  Before you talk financing, send for your credit report and FICO score.  If there are errors or other surprises, contact creditors to make corrections or negotiate settlements.  Also, be sure to notify the credit bureau of your dispute.

Legitimate black marks on your credit won’t disappear quickly.  (It takes seven years; ten for bankruptcy.)  However, time and your diligence can turn things around.  Lenders will give recent responsible activity due consideration.

In our credit-driven society, taking charge of your credit should be an ongoing process.  Your FICO score is a snapshot in time, not set in concrete.  Review It each year for errors that may have crept in and monitor your progress.  You have the power to know it, raise it, and maintain it.