Understanding Credit Score

The very first step you need to take when trying to raise your credit score is to find out what your score is and what it means.  Legislation called the FACT Act was passed that allows all Americans to get one free copy of their credit report every year.  This report lists all of your debts you’ve had and your payment history on those debts.

It will tell you where you owe money, how much you owe, and how you pay (on time, 30 days late, etc.).  All of that information is compiled together and then analyzed.

After the analysis, a number is assigned to you as to what your credit fitness level is.  Potential creditors then look at your credit score and decide if you are going to be able to pay back the amount of money you are requesting to borrow.

That’s the short version.  Actually, there is much, much more involved in determining your credit score.  However, what should be important to you knows how to read your credit report and how to raise that score so that you are able to get the things you need.  Remember that – the things you NEED, not the things you WANT!

Filed under: How To Read Credit Reports