Americans Flunk Credit Score Test
Consumers Urged To Check Credit Reports
POSTED: Tuesday, March 22, 2005
UPDATED: 12:04 pm EST March 22,
2005
A credit score is three little digits that can determine whether you get a loan or a credit card and the interest rate that you'll be charged. A new survey indicates that many people are clueless about credit scores.Executive director Stephen Brobeck with the Consumer Federation of America said 49 percent did not realize that the scores measure whether you're a good credit risk. He also said that while 90 percent understood correctly that paying your debts can raise your credit score, nearly half said that a higher salary or large inheritance would have the same impact. However, boosting your income or wealth would not have a direct impact on a person's credit score.Instead, Brobeck said you've got to pay your bills on time, keep your credit balances low and take out new credit only when you really need it. It's also good to take advantage of the program now being phased in that offers free access to your credit report each year, so you can make sure the information being used to determine your credit score is correct.Credit scores range from 300 to 850 and are calculated from a host of criteria from consumer credit reports that can be broken down into five categories: a consumer’s payment history, amounts owed, length of credit history, new credit applied for or taken out and types of credit used, according to a group of financial services companies called Your Credit Card Companies.For a better credit score, the group suggests that consumers should:
- Shop for a loan within a focused period of time. Looking for a mortgage or an auto loan may cause multiple lenders to request your credit report, even though you’re only looking for one loan. To compensate for this, the credit score counts multiple auto or mortgage inquiries in any 14-day period as just one inquiry. To ensure multiple inquiries do not adversely affect your credit score while you’re shopping for a loan, make them within 14 days.In addition, the credit score ignores all mortgage and auto inquiries made in the 30 days prior to scoring. If you find a loan within 30 days, the inquiries won't affect your score while you're shopping for credit.
- Pay bills on time. Always paying your bills on time is the best thing you can do to help your score. If you've been late in paying bills in the past, it’s important to demonstrate more timely payment patterns as soon as possible. Although late payments shown on your credit report can adversely affect your score, they will count less over time.
- Check credit reports for accuracy. Errors can happen and you may find one on your credit report. If you do spot an error, contact the original creditor and all three national credit reporting agencies -- Equifax, TransUnion and Experian -- so that the inaccurate information won't reappear later. Be sure to order your report directly from one of the three credit reporting agencies or an organization authorized by them so that your request for a credit report won’t be confused with an inquiry from a potential creditor.
- Pay off debt, don’t move it around. Opening a new credit card account to consolidate debt can lower your score for a few months. Your credit score is based on both individual card debt and the total amount of debt on all credit card accounts, so consolidating your credit card debt on one card or spreading it over multiple cards will not help your score in the long run. The most certain way to help your score is to pay down the amount you owe.
Free Credit Reports Available
The free credit report system began Dec. 1 with residents on the West Coast.Here's the roll-out calendar:- Dec. 1, 2004: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.
- March 1, 2005: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.
- June 1, 2005: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, and Texas.
- Sept. 1, 2005: Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, Puerto Rico and all U.S. territories.
- Online: annualcreditreport.com
- By Phone: (877) 322-8228
- By Mail:
- Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
Previous Stories:
- March 14, 2005: Secret Credit Records Keep Consumers In The Dark
- March 1, 2005: More Consumers Can Request Free Credit Reports
- February 17, 2005: Smart Money Moves For 2005
- December 2, 2004: Free Credit Report Program Begins
- November 8, 2004: Daily Saving Key In Fighting Consumer Debt
- November 3, 2004: Denied Credit? Could Be Case Of Mistaken Identity
- November 1, 2004: Free Credit Reports For Everyone Coming Soon
Distributed by Internet Broadcasting Systems, Inc. The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
An 11-year-old Gainesville girl called 911 and helped her mom deliver her newborn baby sister when the big moment came before they could get to the hospital.
A family still coming to grips with the death of two children at the hands of their father -- who then took his own life -- announced plans for a Sunday memorial service.
Former Hurricane Ida drenched Central America as a tropical depression Friday and forecasters said it had some chance of regaining force and heading toward the U.S. next week.
A Camden County High School senior scored a perfect 2400 on his SAT, amazing his teachers, parents and even himself.
The St. Johns County Sheriff's Office arrested 34 people Friday morning in connection with illegal narcotics transactions.
Police said Osmanovic and Gray spent several nights at a south metro motel, and on one particular morning, Osmanovic wore a recording device and said he was going back to the hotel room to be with Gray.
Sept. 9, 2008: Ponte Vedra Beach mother Quinn Gray describes her very physical relationship with the man she said abducted her.
Watch highlights from week 10 of the high school football season on Football Friday on 4.
Crime scene investigators took video of inside Quinn Gray's home the night she was reported missing. Detectives were looking for evidence. Gray claimed she was forced from her home at gunpoint and cops considered it a crime scene.
Watch more highlights from week 10 of the high school football season on Football Friday on 4.
An 800 square foot mobile home in Nassau County was destroyed by fire Tuesday night. Both residents in the home escaped safely.
Quinn Gray showed investigators marks on her arms and legs she said were the result of her kidnapping.
Slideshow
Capturing N.E. Florida's wanted suspects is a tough task, so the local station is trying to help with the Wheel of Justice. Every Thursday morning, the wheel spins and a wanted fugitive is profiled.
Images: Fugitives On 'Wheel'
An extimated 200,000 people came to NAS Jacksonville Sunday to see the annual air show.
Images From Air Show
Email Alerts
RSS News Feeds
Mobile
Live Streams
Slideshows
Video
Search
