You Need Credit Scores With a Credit Report

I recently logged on to annualcreditreport.com to get my once a year free credit report but to my surprise there were no credit scores. In case you didn't know, everyone is entitled to their free credit report once every twelve months at http://www.annualcreditreport.com/. If you too have been there then you know that your credit report did not come with your credit scores. Just about everyone these days is looking at your credit so shouldn't you know what they are? This magical three digit number is formulated to predict how you will pay your bills. Why should you know them?

When you make an application for credit your lender will use your credit or FICO to make a quick on the spot decision as to whether or not you will be approved. The actual credit history is important but the FICO makes it easier for the lender to reach a decision. Before you make application with a lender you should check your FICO score to see where you stand. You'll go in knowing what your fico's are before the lender does. If you have a good one, its advantage consumer. If it is low, then you'll need to spend some time improving it before making a loan application.

While watching TV the other night I saw a commercial for Home and Auto insurance. The man on the commercial says he's looking to put you with an insurance company that's a little smarter than the one you're with now. He goes on to say that some insurance companies base your premiums on your FICO score. "Isn't that dumb?" he says. Well, it may be dumb but it's a reality. Through years of experience and studying the claims history of millions of policy holders the data reveals that people with bad credit are more likely to file a claim than people with good credit. As a result, the better your credit the lower your insurance rates. You can even be denied insurance if your scores too low.

You may not know it but almost every employer is now obtaining FICO scores as part of the interviewing and hiring process. If you are currently out there looking for that better paying job better hope you have good credit. Your credit rating will give the potential employer an idea of what kind of person you are. Just like applying for credit, a lower score could mean higher risk. You could get passed up by another applicant just because of your credit rating.

I would say it is definitely time to know and get acquainted with all three of your credit scores. With credit markets tightening up it's become more difficult to get credit unless you have a decent score. We've just discussed a few different scenarios that affect each and every one of us. What's good?

720 or better is very good

680 average

620 marginal

580 poor