Do you know your credit score? Knowing, and understanding your credit score is the first step towards getting a better hold on your financial situation.
When my husband and I went to apply for a mortgage, I found out that he had no clue what his credit score was. I love him to death, but this man has no idea how to manage financials! I was shocked because Ive been monitoring my credit since I was 18 years old.
What is a credit score?
Basically, its a numerical evaluation of your credit report that companies can use to determine your creditworthiness. It is associated with your social security number so theres no escaping it. The higher your score, the “better” your credit is and the more likely you are to be approved for a loan, credit card, or a better interest rate.
750+ is considered excellent
700-749 is good
650 – 699 is fair
550 – 659 is poor
Anything below 550 is bad
How can I find out my credit score?
There are multiple ways to find out your credit score, but my favorite is to just use a free website called Credit Karma. Its free and it checks your score using “soft” inquiries which wont hurt your score. “Hard” inquiries (which happen when you apply for a loan, for example) can actually make derogatory marks on your score. I check my score every few weeks because Im obsessive but every few months should be fine.
Think of this score like your “financial report card”. If you want to apply for a loan like a mortgage or a car, apply for a credit card, rent an apartment or house, or even hook up cable – they will check your score! Depending on what they find, you can be denied or given a higher interest rate.
More posts to follow that will include what factors influence your credit score and how to improve yours!