“A high score can mean a lower rate for a bank loan while a low credit score can result in more expensive insurance premiums,” Dehnert said. “Not only is it important to understand your credit score, but it is also important to understand how to improve your credit score and reap the advantages of good credit.”
Dehnert said creditors have been using credit scoring systems for some time to determine if people are a good credit risk. Today, many businesses including insurance companies, phone companies and employers use a person's credit score to determine if a product, service or employment offer should be provided, he added.
Credit scoring systems are complex and vary among creditors and businesses, Dehnert said. Essentially, information collected from an individual's credit report is put through a statistical program that compares that specific information against consumers with similar profiles, he added. The program identifies all characteristics that relate to risk and generates a number which represents a credit score.
The higher a credit score, the less of a risk a person is considered to be, Dehnert said. The scores generally range from 300 to 850. A score of 620 or higher should mean that a person is eligible for very good rates, he added.
Anyone can obtain their credit score from any one of the three national consumer reporting companies. The companies are allowed to charge a reasonable fee, typically around $8, for the score, Dehnert said.
“Since your score is comprised of information from your credit report, you need to ensure that your credit report is accurate,” Dehnert said.
To obtain a free annual credit report, visit the or call toll-free 1-877-322-8228.
“You should consider staggering the request for your free report from each of the three agencies over a 12-month period,” Dehnert said.
news source : http://www.wdtimes.com/articles/2008/05/15/news/news3.txt
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