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Credit Resource


What is a Credit Score?

From the moment you began your financial life, your financial information and history has been collected and stored by credit bureaus. Today, there are three major credit bureaus: Equifax, TransUnion, and Experian. The information they collect is analyzed, dissected and finally translated into a "Credit Score."

Credit scores (including "FICO®" scores) are used by lenders to determine creditworthiness. While each lender has its own system of rules for approving or denying loans, credit scores play a large role in their decision.

Credit scores help guide lenders in determining the level of risk of potential borrowers. The higher the credit score, the lower the risk - and the more attractive the borrower is to the lender. The lower the credit score, the more difficult it may be to secure credit. Other factors are attributed to credit scores, including whether you receive a high or low interest rate.

A Matter of FACT

It's easier than ever to receive a copy of your credit report. The FACT Act, or the Fair and Accurate Credit Transactions Act, was written in 2006 to provide U.S. consumers a free annual credit report from each of the major credit bureaus. You can also receive a free credit report under the following circumstances: You have been denied credit, or turned down for a job or apartment in the past 60 days; You are unemployed and currently seeking a new job.  

Understanding Credit Scores 

Credit scores are determined by many different types of information in your credit history. The Fair Isaac Corporation, developers of the FICO® score software used by the major credit bureaus, groups credit information into five categories.

Every Credit Score is Different

Keep in mind that although each credit score utilizes information from all five categories, each credit history is calculated uniquely. The percentage breakdown of each category is a general rule, but may be different from one individual to the next. It's impossible to predict how much weight to give any one given factor of your history. Your best bet is to display positive credit behavior over time.



Note: not all categories are equal. For instance, your outstanding debt counts for 30% of your score, while the credit history length is worth only 15%.

Getting Your Credit On Track

What can you do to make sure your credit history is on the right track? Follow these simple recommendations:

See What's In Your Credit Report.

Check your credit report annually for errors. Not only will it help you correct any errors you may find, but it will help in monitoring for identity theft. Visit for a free credit report.

Fixing Your Credit Reports

Contrary to popular belief, it is possible to correct errors you may find on your credit report. The key is to act quickly, document everything and follow these tips:

  • Contact the credit bureau regarding the error. By law, they have 30 days to investigate and respond to your complaint.

  • If you are currently applying for a loan, inform your lender of the potential error. Let them know you are working to resolve the issue.

  • Once the error has been corrected, ask the credit bureau to send an updated credit report to potential lenders. You can also request that updated credit reports are sent to anyone who requested a copy in the past six months.

If the error cannot be resolved, file a statement with the credit bureau. Write a brief explanation (100 words or less) describing your dispute. This statement can be appended to your report at no charge.

Make your credit payments on time.

Sounds simple, but paying your bills on time is one of the most important aspects of your credit history. Set up automatic payments if necessary.

Pay off your credit cards.

This is one of the best ways to improve your credit history. Do not just shift your credit balances from card to card. Pay down your debt and keep it down. Keep your credit account open to maintain a positive history.

Maintain low credit balances.

Once you pay off your credit cards, don't use them to buy anything you can't afford to pay off at the end of the month. Do not exceed more than fifty percent of your available credit per card.

Be credit wise.

If you have open credit account, use it responsibly and don't use it to excess. Remember, credit scoring rewards borrowers who can manage credit, not people without any credit experience.

What Does This All Mean?

Here's a brief explanation of each category that makes up your credit score:

Payment History- This looks at your record of making your payments on time. Other factors include how many late payments, the severity (i.e 30 days late vs. 90 days late), and how long ago. This category also searches for adverse public records (i.e. bankruptcy, liens, wage garnishments, etc.).

Outstanding Debt- This is a review of how much money you currently owe lenders. It measures not only the actual dollars owed, but how many accounts with open balances you have, as well as how "maxed out" you may be.

Length of Credit History- This calculates how long you've had credit accounts. In this category, longer is definitely better. The last time you used credit is also reviewed.

Recent Credit- This determines whether your credit accounts are new or old. Too many recently opened accounts can drive a score down. This also measure recent credit inquiries.

Types of Credit- The different types of accounts you have are analyzed in this category.

Important Contact Information:

Federal Trade Commission (FTC)
Identity Theft Clearinghouse
600 Pennsylvania Avenue NW
Washington D.C. 20580

Credit Bureaus


To report fraud:
Call: (800) 680-7289
Write: P.O. Box 740241, Atlanta, GA 30374-0241
For a credit report, call: (800) 916-8800

To report fraud:
Call: (800) 525-6285
Write: P.O. Box 9532, Allen, TX 75031
For a credit report, call: (800) 685-1111

To report fraud:
Call: (888) 397-3742
Write: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92834-6790
For a credit report, call: (888) 397-3742

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