Keeping Score (Credit Score)

We live a life of numbers, age, social security, blood pressure, what you got on your SAT’s, the list goes on and on. Most of these numbers change, some don’t, some decrease in importance over time others just keep on growing. One of the numbers that is vital to us as consumers but many of us don’t know is our credit rating. What is your credit score? Until yesterday I didn’t know mine. When a realtor asked me if I knew my credit score I said,” It’s good” and that wasn’t a lie. I pay my bills on time, I was approved for a car loan two years ago. I had no reason to believe otherwise.

It’s important to know your credit rating for several reasons. Loans and credit cards are given based on this number. Most of us know that. What you might not know is that your interest rate is also effected by your score.  Someone with excellent credit might get a car loan with a 1.9% interest rate, while someone with poor credit would get a 6.9% interest rate. On a $15,000 five year car loan that is that difference between a $262.26 a month payment and a $296.31 a month payment. interstIt might seem small but over a 60 month period the person with the 5.9% interest rate spend over 2000 dollars more than the person with the 1.9% interest rate. Imagine what the difference is on the 30 year mortgage.

You should also keep in mind that you are legally allowed a free copy of your credit report every 12 months. All you need to do is go to this website. If you have never seen a copy or if you haven’t done so in  a few years you should order a copy. Errors on a credit report are not uncommon and they can be costly if they go uncorrected. Orders yours and make sure everything is in order.

Getting your credit report and your credit score are two different things. While your credit report is free you will have to jump through a few hoops to get your score. I checked mine using the Experian Website.  I enrolled for a 30 trial of their credit monitoring service. After I got my score and viewed my report I cancelled the trial. It cost me nothing.

Even if you aren’t planing on getting a loan I would encourage you to check your credit rating. My credit report revealed a lot to me. Here is a section of that report(click to enlarge)Credit score 1  As you see in most categories I am doing fine. I have made one mistake though. With my honeymoon coming I opened up several hotel and travel rewards credit cards. While this helped me plan a very affordable luxurious getaway for the Future Bride and I, it did negatively impact my credit rating. 

It’s not the end of the world, as time passes it will improve and as I begin to eliminate the last of my debt I should be able to cross into that “Excellent” category, fingers crossed. 

Now that I know my score I am better prepared to make the needed changes to improve it. If you don’t know your’s I suggest you take a look. 

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