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COLUMN: Know your credit score

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Information is free

By Theresa Howard

Many people are aware that their credit score is important, but do not really understand what it is or how to build a strong credit score. Your credit score is an indicator of the likelihood that you will be able to repay a loan according to the original loan terms, meaning that you pay your loan on time.

Your credit score is calculated based on a number of factors, including late payments, types of credit that you currently have, how long the lines of credit have been open, and your ratio of debt to available credit. The higher your credit score, the more likely you are to qualify for the most desirable loan rates. Credit scores are often used to determine credit worthiness for home mortgages, vehicle loans, and credit card applications.

If you are spending on credit, you need to make maintaining a good credit score a priority. Your credit score is directly linked to the items that appear on your credit report. It is possible for inaccurate information to appear on your credit report.

An inaccurate credit report can hurt your credit score. Everyone should check their credit report on a regular basis. You can receive one free credit report from each of the three big credit bureaus every year.

The three main credit bureaus are Transunion, Equifax and Experian. You do not need to pay anyone to pull your credit report for you. You can obtain a free copy online at www.annualcreditreport.com or by calling 877-322-8228.

You also do not need to get your credit score, if the information in your credit report is accurate, then your credit score will also be accurate. If there is inaccurate information on your credit report, be certain to follow the steps to file a dispute.