CONTACT:
Jackie Nelson
Lutheran Social Service
651/969-2286
Do You Know Your
Credit Score?
LSS introduces new
service to help consumers understand and improve their credit score
(September 8, 2004) - You may
have heard the term credit score, but not thought much about it. Well,
think again.
Your credit score can affect
your ability to secure a loan to buy a home or a car, get a job or even
obtain the services of an orthodontist when your child needs braces. Your
credit score also determines the rate of interest for which you quality on
a loan, which could mean thousands of dollars in savings or costs to you
and your family.
Planning to buy a home next
spring? Need to buy a new car sometime next year? Now is the time to check
your credit report and learn your credit score to see if you need to
develop a get-well plan to improve your score or repair any credit
problems.
Jody Anderson with the LSS
Financial Counseling Service advises obtaining a credit report annually,
or several months in advance of major purchases, like a home or car, that
will require credit. "You don't want to be surprised when you go to your
bank to get pre-approved for a loan," Anderson said.
Credit reports are divided
into four categories: 1) personal identification information, 2) credit
history, 3) public records (including bankruptcies and judgments) and 4)
inquiries into your credit report by banks and other financial
institutions or prospective employers, who may want to use the information
to make a hiring decision.
Anderson says that credit
reports almost always have errors in them and, for that reason alone,
should be reviewed and updated each year.
When you go to the bank to
secure a loan, lenders will check your credit score via the Fair Isaacs
Corporation, which ranks credit scores from 300 to 850. Lenders consider
you a better credit risk when your score is high. While obtaining one
credit report is generally sufficient, Anderson advises accessing a copy
of your credit report from all three of the major credit bureaus if you're
planning on buying a home. Here is the contact information for the three
major credit bureaus:
Equifax:
1.888.766.0008
www.equifax.com
Experian:
1.888.397.3742
www.experian.com
TransUnion:
1.800.888.4213
www.tuc.com
But even when you get a copy
of your credit report, you may have difficulty reading it. There may be
terms like "charge-offs" and "trade lines" that you don't understand.
If you need help understanding
your credit report or determining how to improve your credit score, the
LSS Financial Counseling Service offers a new service called a credit
report review that can help. Through this service, professionally-trained
financial counselors can help you understand your credit report, determine
how you rank as a credit risk, fix errors, file a dispute, or devise a
plan to improve your credit score if it's low.
The cost for a credit report
review ranges from $30 to $80, depending on the number of credit reports
reviewed. Individuals are required to make an in-office visit and bring
photo identification.
In addition to a credit report
review, the LSS Financial Counseling Service offers free budget
counseling, financial education and confidential debt management planning
via in-office appointments, phone counseling or the Internet. The LSS
Financial Counseling Service is a member of the National Foundation for
Credit Counseling (NFCC). For more information, call 1-888-577-2227 or
visit www.lssmn.org/debt
