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Why You Should Care About Your Credit Score

Although your credit score is not a tangible asset that you can hold in your hand and touch, it is a number that affects your well-being. Your score can own you or you can own your score. Credit scores, also known as FICO scores (Fair Isaac Credit Score), were originally created as a tool to assist banks in determining loan eligibility and interest rate charged for prospective clients. Today, credit scores are used for much more. A low score can prevent you from renting an apartment, getting a job, effect what rate you will pay for auto insurance, and if you can buy homeownerís insurance. Your score can also be checked by child support enforcement agencies and any government agency.

There are three credit bureaus that provide credit scores: Transunion, Experian, and Equifax. The scores are based on your payment history, credit card utilization, length of credit history, new credit requests, and types of credit used. The scores can vary slightly from one bureau to the next based on the information available when the score is calculated.  These agencies also provide a Vantage score in addition to a FICO score. The Vantage score considers a sixth variable which is your available credit.

FICO scores range from 300 to 850 while Vantage scores range from 501 to 990. The higher the score, the better your credit rating is. The average FICO score for individuals between the ages of 18 and 29 is 637. The average score rises with age but there are many events that can damage your score. Bankruptcy will stay on your record for 10 years and can drop your score by 240 points. Maxed out credit cards increase your risk of default and lower your score. A bad debt-to-credit ratio (which is the total balance owed on all lines of credit available compared to the overall credit limit issued) can lower your score if the balances are too high. Home foreclosure, repossession, not paying your bills, and collection notices can also significantly lower your overall score. 
The best way to positively impact your credit score is to pay all your bills on time and live within your means. Create a budget and stick to it. Only borrow what is needed instead of the full amount available to you. Pay the balance on all credit cards every month. Following these simple suggestions will put you well on your way to a healthy credit score and a happy, prosperous future.

We hope you will find these tips helpful.  If you have any questions, contact us at

Money Matter$
"Utilize your resources. A lot of times students aren't aware of the multiple resources on their campus and many times they can help the most."  -Tracy H. My College Success Student Success Strategies
August 22, 2013

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