Whether or not your know it, your entire financial reputation boils down to one 3-digit number, ranging from 300 to 850, known as your FICO score. So why should you care about your score? Consider this, whenever you apply for a car loan, apartment rental, home mortgage, line of credit, or credit card, your credit score is used as the determining factor as to whether or not you get approved. Many companies will even use your credit as a determining factor when applying for a job! It is truly the most important number in all of your financial activities, but you can't do anything until you know exactly what your score is, right now.
What is the Average FICO Score?
Your FICO credit score is the result of a mathematical formula which includes your payment histories for credit cards, bills, and loans, as well as your current amount of debt, number of credit cards, and length of financial history. The average American has a score of between 700 and 720. This is seen as being a "Good" credit score and will result in lower interest rates and more favorable terms on any loan you take out. Any time your score falls below the 650 mark, you are starting to get into trouble, and anything below 590 is just downright bad credit. Don't worry too much though, as there are ways to improve your FICO score should you find yourself out in the credit doghouse.
Improve Your Credit – Check Your FICO Score!
While millions of Americans check their credit scores online every year, millions more have no idea what type of shape their credit is in. It is extremely common for FICO scores to contain errors, outdated information, and even fraudulent entries, all of which can contribute to a damaged credit rating. When you check your credit information online, you can scan over your entries to check for anything that seems out of place. There are dozens of websites offering free credit reports online and it is your right to obtain this information for free, once per year. These sites will usually offer additional paid services, such as identity theft protection, but these services are not required to obtain your score.