One of the most important numbers that relates to your financial health and well being is the three-digit number that is your credit score [1]. A credit score speaks volumes about your ability to obtain a car loan, a home loan, or even in some cases a new job! The credit score is created from the reports of your payment of bills, and the amount of credit you have available to you, and whether or not there are delinquencies in payment to creditors.
All of these factors are combined together to create a person’s credit score. This score ranging either from 501 to 990, or more commonly from 501 to 850. The higher the score received, the better your credit rating [2] is. The better your credit rating, the easier it becomes to get loans, make large purchases (homes and cars), and negotiate lower interest rates [3] for important purchases.
It is possible to get a free copy of one’s credit report each year, from each of the major credit reporting companies. It is wise to compare the information form each report against the others, so that all inaccuracies can be cleared up quickly.
Individuals should always be aware that it is possible for mistakes to show up on a credit report! Sometimes this can be due to faulty reporting, other times it is because of identity theft of other forms of fraud. Regardless of the original source of the problem, it is a very good idea to check one’s credit score and credit report periodically to make sure that there are no nasty surprises lurking to lower the score unfairly. This is one case where one is definitely better safe than sorry!