Your Credit Score

Vital to Financial Success

Did you know that your credit score is a tool that lenders use when you apply for a mortgage, consumer loan or credit card?  Your credit score can affect the interest rate you pay and whether or not you will be approved for a loan.  A good credit score is vital to your financial success.

What is a good credit score?

A credit score of 720 or higher is generally considered good. “Your credit score is a grade assigned to your credit history that expresses your creditworthiness as a single number.  Higher credit scores mean you’re less of a risk, which means you are more likely to be able to borrow larger amounts at lower interest rates. Lower credit scores mean you’re a higher risk, and are therefore more likely to be offered lower amounts at higher interest rates.” (BOA )

 What is a credit report?

There are three major credit reporting bureaus in the US; TransUnion, Equifax and Experian. “[They] collect information from public records and companies that you do business with. They use that information to create a record (your credit report) that includes:

  • Personal information to identify you, including name, current and previous addresses and Social Security number
  • A list of your credit accounts, including reports from creditors
  • Public record information and information from collection agencies, including delinquent accounts, bankruptcies, foreclosures, lawsuits, wage attachments, liens and judgments
  • Credit inquiries (a list of everyone who has asked to see your report in the past 2 years)

All these pieces of financial information factor into your credit score. “ (BOA)

Ten things you should know about credit reports and scores


  • Lenders look at credit histories – this determines how much credit is available to you and under what terms.
  • Why you should care about your credit – lending decisions are based on your credit report.
  • Credit bureaus track borrowing behavior – they track how you previously behaved when you were loaned money, whether you paid back on time, who you still owe and how much you owe.
  • Credit reports include several types of information – included are identifying information, account history, data from public records, credit history inquiries.
  • Some credit information could be wrong – you should periodically request a copy of your credit report because it may contain incorrect information.  Errors should be addressed immediately because it can hurt your ability to borrow money.
  • Credit data used to calculate credit scores – lenders use your credit score to determine how you rank as a borrower. “A credit score is a number that summarizes your credit risk, based on a snapshot of your credit report at a particular point in time.” “A credit score helps lenders evaluate your credit report and estimate your credit risk.”
  • Fair Issac’s FICO score is the most widely used credit score – this is a secretive formula used by credit bureaus to convert a consumer’s credit history into a three digit number. The credit score range is from 300-850, with a higher number being better. But each lender uses their own criteria to help them make lending decisions. 
  • Other credit scores – other companies exist that calculate credit scores, but the FICO score still remains the most widely used.
  • Credit reports for free, credit score for a price – under the Fair Credit Reporting Act (FCRA) credit bureaus must provide consumers with a free credit report every 12 months.  This does not, however, include your credit score (FICO).
  • Service providers, employers may also review your credit report – “It’s not just banks and credit card issuers that may consider your credit history. ‘Most lenders as well as many service providers and employers utilize consumer credit report information in assessing applications for credit, services and employment.’” “In other words, credit histories impact more than just applications for credit – they may also matter when you are purchasing a cell phone plan or applying for a job.”

 How to obtain a free copy of your credit report – (FTC)

You can request a free copy of your credit report from each of the three credit reporting bureaus (Equifax, TransUnion and Experian) once every 12 months. All three agencies have established a central website, a toll-free number and a mailing address where you can order a free annual report. Do not contact the reporting agencies individually, they only provide free reports when contacted through one of the following ways:

  • Online -
  • Phone - 1-877-322-8228
  • Mail – visit (FTC) and click the link to download the Annual Credit Report Request Form.  Mail the form to Annual Credit Report Request Service, PO Box 105281, Atlanta, GA 30348-5281

 Other times you are entitled to a free report - (

“The 2003 law (Fair and Accurate Credit Transaction Act or FACTA) did not eliminate the other ways to receive a free credit report. You’re still entitled to yours if you meet any of the following conditions:

  • You applied for a loan and were turned down. You can request by writing the correct credit bureau within 30 days of your rejection. Enclose a copy of the declined loan application with your request.
  • You’re unemployed and planning to apply for jobs in the next 60 days
  • You’re receiving public assistance
  • You believe your credit file contains mistakes due to fraud
  • You currently reside in a state that offers a free annual report from each credit reporting agency by state law. Residents of the following seven states are entitled to one free copy of their credit report every 12 months from each of the three main credit agencies per federal law and one free copy of their credit report every 12 months from each of the three main credit agencies. States include: Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey and Vermont.

The second free report can be obtained by directly calling or writing each credit bureau:
Equifax: 1-800-685-1111   (P.O. Box 740256, Atlanta, GA 30374)
Experian: 1-888-397-3742   (P.O. Box 2002,  Allen, TX 75013)
TransUnion: 1-800-916-8800  (P.O. Box 2000, Chester, PA 19022)

Include the following info in your letter. Be sure that each person requesting the report signs and dates the request.

  • Your full name
  • Date of birth
  • Current and former address
  • Social Security number
  • Your spouse's name
  • Your phone number” 


Federal Trade Commission

Bank of America

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