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More of What you Need to Know About Your Credit Score

On Behalf of | May 12, 2017 | Consumer Protection

Your credit score is an important number to you.  It is calculated based on the information contained in your credit report; it is a number that tells lenders what type of consumer you are; a number that will decide whether or not you are approved for credit and at what rate; a number that may affect your ability to get a job.  The more you understand what makes up your credit score the more prepared you will be to increase it and have more financial opportunity.

Average to Excellent Credit Score Ratings

An excellent credit score is considered to be somewhere around 720.  The average American consumer has a credit score of 695.

Credit Report Errors

Approximately twenty percent of all credit reports contain errors.  That being said, reviewing your credit repot and checking for mistakes may be a good way to increase a score of 695.  Errors include inaccurate personal information and inaccurate account information.

Disputing Credit Report Errors

While twenty percent of consumers have errors on their report, as high as eighty percent of consumers who make the effort to dispute have some type of change to their report.  Under the Fair Credit Reporting Act, (“FCRA”) upon receipt of a dispute from a consumer, the credit reporting agency must conduct an investigation and respond to the consumer within 30 days with the results and modify a credit report accordingly.

Reviewing Your Credit Report

Almost half of American consumers have reviewed their credit score within the past year and nearly two thirds of consumers have reviewed their score within the past three years.  However, around twenty percent of consumers have never reviewed their report.

Lowest Credit Score Demographics

While you would think that younger consumers would have the lowest credit score, it turns out that consumers ages 30 to 40 are most likely to receive a low to poor credit rating.  Experts believe this age receives the lowest marks because they have the greatest financial responsibility, paying off student loans, auto loans, mortgage loans, new family members to pay for, etc.

How Consumers Can Have No Credit Score

One out of ten American consumers do not have a credit score.  Credit scores can only be calculated for a consumer that has a credit history.  If you are new to the financial world and have not been an established consumer for a decent length of time, the credit reporting industry cannot establish a credit score to accurately reflect your financial worthiness.

How Consumers Can Have Multiple Credit Scores

Consumers can have more than one credit score.  Each of the three major credit reporting agencies, Equifax, Experian, and Trans Union have their own system for calculating your score and each of them may not have the exact same information on you.  Because your score is based on the information contained in your report, each reporting agency’s score may vary accordingly.

Managing your credit can mean more money in your pocket.  Stay on top of your finances and review your report regularly.  If you are in need of financial assistance or believe your rights may have been violated under the Fair Credit Reporting Act, contact SmithMarco P.C. for a completely free case review.