Why is your credit score so important?  It’s not just banks and lenders that rely on credit scores to help make important credit decisions.  Landlords, employers, insurance companies, and even cell phone and other utlity companies all reportedly utilize credit scores to help determine their business and credit relationships with consumers.  This means that your credit is the most important component of your entire financial portfolio.  Because of this, monitoring and managing your FICO score is vital, especially if your looking to buy or refinance a home anytime in the near future. The FICO scoring system was created in the 1960’s by Fair Isaac Corporation and has been the standard for lenders since the 1980’s.  FICO credit scores typically range between a low score of 350 to a high score of 850.  Under the FICO system, securring credit becomes less expensive for borrowers with higher scores (thos who represent the least risk) and more expensive for borrowers with lower scores (those who represent the most risk).  In fact, when it comes to a mortgage, a lower credit score could easily cost a consumer hundreds of thousands of dollars more in interest throughout the life of the loan, compared to the same loan with ah igher credit score. There are many ways you can get access to your credit score via the interent. 

If you visit www.annualcreditreport.com you they will be able to furnish you 1 free annual credit report which is required by federal law.  You need to know what is on your credit report because knowing will be half the battle in getting your score in the 800’s.  In my next column I will talk to you about what needs to happen next once you have a copy of your report.  I will show you how you can begin to improving your score so you can put yourself in a better financial position for the future.