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Tips for Consumers: Our Important Credit Score

Tips for Consumers
Our Important Credit Score
by Nicholas Greaves

Do you know what your credit score is? We all know about our credit report, which tells our purchasing history. But many consumers in the Hagerstown area are not aware of an equally important number, the credit score, which influences our financial future.
Your credit score is a single number that helps lenders, landlords, even employers decide how likely you are to pay your bills. It is based on an analysis of your credit report, which lists your debt and repayment history. Do you have any credit cards? A car loan? A student or bank loan in your name? A department store charge account? If so, and if you have a credit report, you also probably have a credit score.
Credit scores are computed by the Fair Isaac Corporation (FICO). Scores range from 300 to 850. A score over 700 indicates relatively low credit risk, while a number below 600 reflects higher risk. This could make getting a loan more difficult or result in higher interest rates.
Here is an example of how important this number can be. The difference between a 580 and a 720 FICP credit score could mean a three percentage point difference in a mortgage rate. This would represent a $72,000 difference in mortgage loan costs over the lifetime of a 30-year, $100,000 fixed-rate loan.
What goes into your score? Your payment history affects about 35%; how much you owe 30%; length of your credit history about 15%; and applying for new credit about 10%.
Here are some tips on raising your FICO credit score:
* Establish a credit history such as a credit card in your name.
* Pay your bills consistently and on time-before the due date. If you miss a deadline, send in the payment as quickly as possible.
* Don't "max-out" your credit line. Keep well within the credit limit.
* Pay off balances instead of moving debt to other credit cards.
* Be sure to get your free credit reports to make sure they are accurate. Call 877-322-8228 or go to The three credit score (and other services) for a modest fee.
* Don't forget that you can check your BBB reports on thousands of companies before you buy. Visit our web site,, or call us 24 hours a day at 410-347-3992. If you have a complaint, use the web site complaint form or mail us details at: BBB, 1414 Key Highway, #100, Baltimore, MD 21230. Our office serves Hagerstown and all of Washington County.

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