Your credit score is important. Most businesses at some point borrow money. A ‘very good’ or ‘excellent’ credit score can save you money with lower loan rates.
Your credit score is a numerical rating that lenders use an indicator to determine if you or your business are a good credit risk. Your credit score is a reflection of many data sources: payment history, current unpaid debt, how long you have had credit, the number of credit inquiries and the types of credit you have had in the past to name a few. Credit bureaus may even ‘data mine’ your buying habits. They watch indicators of economic hardship. We’ve heard buying and charging re-tread tires will nick your score a few points.
All credit scores fall between 300 and 850. The higher the credit score the better. Most people score in the 600 and 700’s. Credit scores above 700 are normally considered very good. If your credit score is weak, start working to clean it up. Take care of any judgements, collections or past due items you may have.
Some interesting facts:
SCORE % of Population Grade
300-499 1 500 – 559 Very Bad
500-549 5 560 – 619 Bad
550-599 7 620 – 674 Fair
600-649 11 675 – 699 Good
650-699 16 700 – 719 Very Good
700-749 20 720-850 Excellent
800 and higher 11
Under Federal law, you have the right to obtain a free copy of your credit report from each of the nationwide consumer reporting agencies once a year. But that’s just the report not the number. So a word to the wise: Check your credit once a year then spend the extra six or eight bucks to get the number.
If it’s low get to work to raise it. To order your free annual credit report:
By Telephone: Call toll free: 1-877-322-8228
On the web: Visit www.annualcreditreport.com
By Mail: Mail your completed Annual Credit Report Request Form (which you can obtain from the Federal Trade Commission’s web site at: http://www.ftc.gov/bcp/conline/include/requestforfinal.pdf ) to:
Annual Credit Report Request Service
PO Box 105281
Atlanta, GA 30348-5281