Credit Report 3 1 – The Key to Better Rates: Improve Your Credit Score

Whether you accept the idea or not, your credit score and credit report are key elements when applying for new loans, or credit cards. Your credit score is computed using the information found on your credit report 3 1. Once you have debt under control, it’s time to tackle the credit rating/scoring game. 

Credit scores were created to assist banks and businesses to help make financial decisions about you. A mathematical calculation is used based on your credit report data.  The end result is a numerical rating. FICO scores vary from a low of 300 to a high of 850. Lenders consider a score of 760 and above as ideal.   

The majority of the big banks, credit card banks and car loan lenders also utilize the FICO score.  Your interest rate is determined based on your score and includes rates for mortgages, auto loans and credit cards. 

While FICO score is the most popular, it isn’t the only method with which scores are calculated.  The 3 major credit reporting bureaus — TransUnion, Experian and Equifax calculate the Vantage Score, which ranges from 501 to 990. 

As of April 2010, the FTC mandated that is the only authorized source for free credit reports. (You have to pay extra to get your credit scores.)  This web site is sponsored by the 3 major credit reporting bureaus. You can also obtain a free copy your credit report once a year from each of the 3 main credit bureaus directly. 

 By law, you have the right to get a free copy once each year.  The reports are delivered separately and not combined into the credit 3 1 format. There are companies that combine your credit report data so that you get the credit 3 1 reports but usually those are paid services. 

The problem is once a year may not be enough, especially when you are in the process of improving your credit score.  To solve this some companies will monitor your credit scores for you and give you frequent updates.  Here is just 1 example:

Once you have received your reports, look at them thoroughly. Search for any errors. Make certain it is your credit history and not someone with the same identity. Check your address. Someone with the same name and different addresses can cause confusion. Also look for out of date data and signs of id theft. Look for delinquencies, strange or unrecognized items etc.  If you find errors, contact the appropriate credit bureau immediately.

Keep in mind a high credit score gets you a lower rate on your loans and credit cards. This will save you money over time.

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