Know Your Credit Score

Everyone keeps a record of how much funds are in their bank accounts. Chances are, everyone also keeps a tally in the back of their check book which they balance with the bank statements they receive on a monthly basis. As important as it may to be know how much money is available before one writes a check, it also equally important to know your credit score.

Not knowing your credit score can cost you financially. Many factors go into determining an individual's credit score. Some factors include the number of credit accounts on has, late payments, outstanding debit, collection actions and bill payment history. Once this information is compiled, statisticians compare their information with other consumers and give them points for each factor of their history that shows good credit risk. An individual's total number of points are then added up which is the credit score.

A credit report is the tracking of all credit purchases and payments compiled by a credit bureau and made available to agencies trying to determine whether or not to give an individual a loan. The report lists every account an individual has open, even if they contain balances with no finances. Usually, information published on the report stays on it for seven to ten years.

Even though it may not seem important, everyone should know their credit score. If an individual is preparing to apply for a home loan, they should know what their financial status is before the lender sees it. If there is an inaccurate statement, individuals will have a chance to get it fixed so they don't ruin the chance of receiving a loan. Having a credit report and score in hand will also give individuals the chance to close any old financial account they don't use. Having too many open accounts can influence the amount of credit an individual is eligible to receive.

Everyone is entitled to a free credit report which indicates their score. The law requires each of the three credit bureaus to provide individuals with a free credit report each year. They can take them all at once or spread them out over a certain amount of time, but they have to know its important to obtain them and make sure their information is accurate.

Knowing what your credit score is can be very useful. Not only can it make an individual a lot more secure and organized, but it can also help them fix bad credit. Solving financial problems is important because it can make the difference between receiving financial help and being ignored.