Most likely, you are already familiar with the concept of "credit."  Credit is the reputation that you have earned by paying your bills consistently and on time. Credit makes it possible for you to obtain money or goods with the understanding that you will pay for them later.

In fact, you probably have already put your credit to work for you. You may already have a credit card in you wallet which allows you to purchase goods and services on "good faith."  You may have employed your credit when you obtained an auto or student loan,  paid for a trip or new suit, or when you were chosen as the tenant for your rented apartment or house. A solid history of paying your bills on time may also have been just the objective character reference needed to help you land your job too.

But even if you use your credit every day, you may have questions about the credit industry and how it affects you. In today's society, credit is much more complicated than just keeping a tally of what you have bought and sold at the local grocery store. As a credit-active consumer, you need to know how credit reporting works, what your credit report contains, and how you can repair any damaged credit.

What Is a Credit Score?
What is a credit score? This is one of the most common credit questions asked. Credit scoring is a scientific method of determining an individual's credit worthiness based on their credit history and current credit accounts.

There are three major credit bureaus: Equifax, Experian and Trans Union. A credit bureau score is a number, based upon your credit history, that represents the possibility that you will be unable to repay a loan. Lenders use it to determine your ability to qualify for a mortgage loan. The better the score, the better your chances are of getting a loan. Ask your lender for details.

Creditors (especially in the mortgage industry) use these scores, known as FICO scores, as an important factor in the decision of whether or not to offer credit. The scores range from 375 to 900 points. Under mortgage lending guidelines a score of 650 or above indicates a very good credit history. People with these scores will usually find obtaining credit quick and easy, and will have a good chance to get it on favorable terms (often meaning lower interest rates or fewer points).

Obtaining your credit report is as easy as calling and requesting one. Once you receive the report, it's important to verify its accuracy. Double-check the "high credit limit", "total loan," and "past due" columns. It's a good idea to get copies from all three companies to assure there are no mistakes since any of the three could be providing a report to your lender. Fees, ranging from $5-$20, are usually charged to issue credit reports but some states permit citizens to acquire a free one.

If you have any questions or concerns about your credit score, credit history, or how to fix problems on your credit report, then contact one of the following credit reporting agencies...

Credit Reporting Agencies

Experian
P.O. Box 9600
Allen, Texas 75013
800-682-7654
www.experian.com

Equifax
P.O. Box 105873
Atlanta, Georgia 30348
800-685-1111
www.equifax.com

Trans Union
P.O. Box 1000
Chester, Pa. 19022
800-916-8800
www.transunion.com