Understand and Improve Your Credit Score

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It's Get Smart About Credit Day. So how smart are you about credit?

SEE ALSO: 11 Credit Card Mistakes to Avoid

For starters, do you know your credit score ? The most common credit score is the FICO score, which is based on your credit history (basically a summary of how much you owe and how promptly you pay your bills). Lenders use it when determining whether to give you a loan or offer you a credit card and at what interest rate. The FICO score ranges from 300 to 850, and you usually need a score of 760 or higher to get the lowest interest rates on loans. You can get your score at myFICO.com for $19.95, or for free if you've been denied credit or charged a higher rate because of your score (see How to Get Your Credit Score for Free ).

You actually don't have just one FICO score. You have three based on your credit reports from each of the credit bureaus -- Experian, Equifax and TransUnion. If the information on your credit report varies from bureau to bureau, your FICO scores can vary, too ( learn more ). You can get a free copy of your credit report from each of the bureaus at www.annualcreditreport.com to find discrepancies and fix them.

The credit bureaus also have their own credit score -- the VantageScore. See Understanding Credit Scores to learn about the differences between your VantageScore and FICO score.

If your credit score is low, there are several ways to get your number higher. See Fast Ways to Improve Your Credit Score for tips, and take our Will It Sink Your Credit Score? quiz to find out what actions you should avoid.

For more advice, see our Credit and Money Management page.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Credit and Debt

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