Good credit translates into lower rates for the consumer
A good credit history is more important than ever. Solid credit keeps down the cost of consumer financing, and it can be the deciding factor in whether an auto or home loan application is approved.
In today's fast-paced, high-tech age, your credit history will be reviewed more often by artificial intelligence than human intelligence. Computerization has made the loan process much more efficient. That's a good thing. But computers take all the subjectivity out of a credit evaluation, and that means you have to take ownership of your own credit standing to make sure you're not blindsided by a stain on your record.
It is important that everyone know his or her credit score. Everyone is entitled to one free credit report a year. Various companies can show you're your credit profile. Fairly frequently, erroneous information appears on a credit report. This can take a few months to correct, which might mean the difference between being able to purchase your dream home or not.
Credit scores usually range from 400 on the low side to 800 on the high side. On rare occasions, these ranges can be exceeded. Sometimes a score cannot be obtained for factors like lack of credit history or too few lines of credit.
If you know your score, then you can see what the creditors see and have the ability to get a jump-start. Here is a quick breakdown of what a score means to a creditor:
| 720 and over: | WONDERFUL! You are at the top with the best rates and terms offered to you. |
| 700-719: | Excellent score. You are a very desirable borrower. |
| 660-699: | OK credit. Don't look for other exceptions. |
| 640-659: | Borderline. OK if everything else is strong. |
| 620-639: | Weak. The rest of your file must be perfect. |
| 600-619: | Difficult. Need some work, or a special program. |
| Below 600: | Trouble! Try to fix up your credit! |
The three credit bureaus are Experian, Trans Union, Equifax. Each offers information on obtaining your credit report at their web sites:
