Tax season is a good time to take a holistic look at your finances, including your credit score. You may be looking for ways to improve your score, or just trying to figure out how to find it. Here are a few credit score basics.
- Where do they come from? Your credit score is a summary of your credit report. The number and type of accounts you have, timeliness of your bill payments, utilization of your current available credit, outstanding debt, age of your accounts and any collections against you are all pieces that may be used in calculating your score.
- How do they change? Any change to your credit report can result in a change to your credit score, e.g. alterations to any of the above mentioned pieces. Even one missed payment can result in a decrease in your score. On the other hand, paying down any outstanding debt can help give your score a boost. Paying your bills on time is one of the most important steps you can take to improve your credit score.
- Why are they important? Your credit report is a key way in which lenders, employers, insurers and others assess your ability to manage financial responsibilities. A poor score can hold you back from obtaining loans, housing leases, utility services, insurance and even jobs. A better score can save you thousands of dollars in the form of lower interest payments on loans.
- How do I find it? By law, you are able to obtain a free copy of your credit report every twelve months from each of the three major credit reporting agencies, Experian, Trans Union and Equifax. For more information on attaining your credit report, click here.