How Healthy Is Your Credit?

Understanding Your 3 Credit Report Score

Getting your 3 credit report scores is the only way to get a complete picture of your credit history and where you stand financially. Most people don’t realize it but they actually have 3 very different credit scores. Credit card companies and other lenders aren’t legally obligated to report to any specific credit bureau so the different credit bureaus sometimes have different information. Not only that, but one or more bureaus may have incorrect information on your credit report which can substantially lower your credit score.

When you apply for credit there’s no telling what credit bureau a lender may pull your credit report and credit score from so it’s important that you have the best possible credit score at all 3 credit reporting bureaus. Just one low score could potentially ruin your chances of getting a new credit card, a loan for a car, a mortgage, or even that dream job you just applied for.

Who Provides Credit Scores?

The biggest and most popular consumer credit reporting bureaus are Experian, Equifax and TransUnion. They all have their own independent database that they use to provide credit reports and credit scores. They also use different methods for calculating your credit score so while the same financial information may be reported to all the credit bureaus your score could be significantly different from one to another.

While you may be entitled to a free annual credit report based on the Fair Credit Reporting Act, unfortunately this isn’t the case for your credit scores. You may be able to get your 3 credit report scores for free, although it will typically require enrollment in a credit monitoring service package through the credit bureaus. When you enroll you will typically gain access to all 3 credit scores from each credit bureau no matter who you sign up through.

What is a Good Credit Score?

The very best credit score to have would be 720 and above. If you are currently scoring at 720 or better there really isn’t any reason to try and improve your score. Lenders will generally lump people with 720 or better into one group. To qualify for the best rates you will typically need a score of at least 690.

Over 40% of people have credit scores that fall into the 580-680 range. This could be considered an average credit score. If you have a credit score in this range you may not have trouble getting credit from a lender although you won’t typically qualify for the very best rates or terms and conditions.

Anything below about 550 is considered bad credit with 300 being just about rock bottom. People with scores in this range will have a difficult time getting any credit. Paying down debt and making all of your payments on time is the easiest way to help improve your credit score, although it can take a few years for negative entries to stop hurting your score as much.

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