{"id":464,"date":"2012-03-26T17:18:38","date_gmt":"2012-03-26T17:18:38","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=464"},"modified":"2012-04-29T21:19:20","modified_gmt":"2012-04-29T21:19:20","slug":"credit-score-reality-check-is-760-the-new-680","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=464","title":{"rendered":"CREDIT SCORE REALITY CHECK: IS 760 THE NEW 680?"},"content":{"rendered":"

Read Published Article in USAA.com
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The bar has been raised for the three-digit number lenders use to determine your worthiness to borrow money.<\/p>\n

“Three years ago, a creditworthy borrower was someone with a 680 to 700 score. Now, to get the best rates, that score needs to be 760 and up,” says Greg McBride, senior financial analyst at Bankrate.com. Your three-digit credit score generally ranges from 300 to 850. The higher your score, the better credit risk lenders deduce you are.<\/p>\n

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What’s in the Mix<\/th>\n<\/tr>\n
Each credit reporting agency uses a scoring system that calculates your number using slightly different variables based upon the credit data they have on you. Because they use differing numerical scales, your score could vary from one credit bureau to another.These percentages used by Experian PLUS Score provide an example of how each agency determines your score:<\/p>\n

Payment history and bankruptcy<\/strong>\u00a031%<\/p>\n

Credit card debt<\/strong>\u00a030%<\/p>\n

Length of credit history<\/strong>\u00a015%<\/p>\n

Type and number of credit cards<\/strong>\u00a014%<\/p>\n

Credit card applications, inquiries<\/strong>\u00a010%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The sobering news is 60% of all Americans have a score below 750, according to data compiled by Minneapolis-based Fair Isaac Corp., which runs theFICO<\/span><\/span><\/a>\u00a0scoring system most lenders rely on.<\/p>\n

Why should you care about your credit score? Lenders use it to determine your interest rate and whether to even lend you money. Many insurers use it to set the size of premium you pay on auto and home insurance. Landlords may use it when deciding whether or not to rent to you, while some employers review it when deciding to hire you.<\/p>\n

Fortunately, you can improve your score and have an easier time getting credit by following these six strategies.<\/p>\n

1. Review your credit report.<\/strong>\u00a0One of the biggest factors swaying your credit score could be a mistake on your credit report, including outdated data, paid-off loans listed as due and money owed by relatives or strangers with names similar to yours.<\/p>\n

You can stay on top of your information by going to\u00a0AnnualCreditReport.com<\/span><\/span><\/a>\u00a0every 12 months to request a free credit report from each of the major three reporting agencies \u2014\u00a0Experian<\/span><\/span><\/a>,\u00a0Equifax<\/span><\/span><\/a>\u00a0and\u00a0TransUnion<\/span><\/span><\/a>. Your credit score isn’t included in the report. You’ll have to pay the agencies around $15 for it.<\/p>\n

For unlimited access to both your credit report and score throughout the year, consider signing up forCreditCheck\u00ae<\/span><\/sup>\u00a0Monitoring<\/span><\/span><\/a>\u00a0offered through USAA.<\/p>\n

If you have disputes on your report, you’ll need to work with the individual credit agencies. Be prepared: Errors could take up to six months to get fixed.<\/p>\n

2. Stabilize your credit.<\/strong>\u00a0“If you know you’re going to buy a new car or be in the market for a home in three to six months, don’t open new accounts, close accounts or transfer balances.” advises Maxine Sweet, vice president of public education for Experian.<\/p>\n

Also, stop applying for credit cards you don’t really need. For example, say no when a department store offers you 10% off the purchase if you open a new credit card account. You can be docked 10 points just for applying for a store credit card.<\/p>\n

3. Use the credit you have.<\/strong>\u00a0“Your credit history is your credit reference when you go for a loan. You need to show that you know how to manage credit by paying balances and making payments on time,” advises Sweet.<\/p>\n

4. Get a handle on your bills.<\/strong><\/p>\n