In the thick of both tax season and a credit/mortgage/economic crisis, a lot of us have money on the brain. And we're being told to work on our credit scores if we want to see any loan money come our way. So, how do we work on said score?
Andy Jolls's 60 second video tutorial at lifehacker tells ten truths (and dispels some myths) about your FICO.
Here they are (adapted from I Will Teach You To Be Rich):
1. There are actually three scores, one from each credit bureau (Equifax, Experian and Transunion).
2. Most lenders use FICO scores to determine your eligibility–90% of mortgages use them.
3. 20% of employers check your credit! (This came as a shock to me). So even if you're not house-shopping, it matters.
4. Your score may be different at different bureaus.
5. Annual credit reports are free (get yours at annualcreditreport.com), but the actual FICO costs a fee.
6. Closing credit card accounts can actually hurt your score. While I've heard conflicting advice on this, bankrate.com has the long answer which corroborates that closing is counterproductive.
7. You don't have to keep a credit card balance to raise your score (paying it off is a better bet).
8. Checking your own score (from a non-lender) won't bring it down.
9. Online loan shopping does not hurt your score (good news indeed). Just do it in a short time span (inquiries within 30 days count as 1!).
10. Work on your credit score yourself, don't rely on anyone else to do it for you.
There you have it. Still want more on the score? The Consumerist has six recent changes to FICO calculations.
And here's how Americans score. And what those numbers actually mean.
Photo credit: bankrate.com
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