Are YOU being Pro-Active about your CREDIT SCORE?

Information gathered by Experian, Equifax, and TransUnion is used by various financial institutions, insurance companies, and even employers to determine the creditworthiness and reliability of American consumers. A recent 8-year Federal Trade Commission study revealed that as many as one out of five Americans has an error on their personal credit report[1]. The following are steps that all consumers can take to ensure that their credit score is not only accurate, but the highest it can be as well:

  1. Understand the method behind the calculation of credit scores.
    The most prevalent and widely used credit score is the FICO score (ranges from 300-850), which is developed by the Fair Isaac Corporation. In 2006, the three credit reporting agencies developed the Vantage score (ranges from 501-990) as an alternative to the FICO score.

What's In Your FICO Score -- This link provides information on how the finalized FICO credit score is determined, as well as what information is and is not considered in the process.

What's In Your Vantage Score -- This link provides information on how the finalized Vantage Score credit score is determined, as well as what information is and is not considered in the process.

  1. Monitor credit report and credit score periodically.
    Consumers are entitled to receive one free credit report annually from each of the three credit reporting agencies. It is important to review these in order to ensure that all of the information being reported is accurate, as a lower score can be costly.
  2. You can order your report in the following ways:
  3. Visiting ;
  4. Calling (877) 322-8228 ;
  5. Completing the Annual Credit Report Request Form (available on the website above) and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
  6. If, when your free copy of your credit report is received, an error is revealed, you should take the following course of action:
  7. Attempt to communicate directly with the lender on the account that the error was found. This may be the easiest way to resolve a dispute as this is most likely where the error originated from.
  8. File a complaint with respective credit reporting agency. The agency must investigate the report respond, usually within 30 days.
  9. Since it is imperative to monitor your credit report and score frequently, provides not only a depiction of active accounts, but also a credit score. This can be checked as often as the consumer would like, with no detrimental effect on their score (unlike credit reports).
  1. Make timely payments on outstanding debt.
    A major factor in the credit score calculation is timely repayment history, even if it’s simply the minimum amount. Making payments on-time shows reliability, and will significantly improve and/or maintain a high credit score. Strategies to assist in making this happen:
  2. Setting up auto-payments with the bank/company.
  3. Setting calendar reminders for when bills are due.
  4. Schedule and e-mail to be sent as a reminder for when bills are due.
  1. Keep credit utilization under 30% of total limits.[2]
    Ideally, consumers should only charge what they can afford to pay in full each month, which more often than not, does not hold true. Higher utilization rates show creditors that consumers are living beyond their means, and using debt to maintain this lifestyle. Maintaining a credit utilization of 30% or less of total limits will help to improve overall credit score.
  2. Keep older, good credit accounts active.
    Although it is not preferential to maintain a large amount of open, inactive accounts, it is beneficial to retain older credit accounts with positive repayment history. The length of time that a consumer has in their credit history impacts their credit score. Closed accounts are removed from a credit report after 10 years, so the positive repayment history will be lost.
  3. Only apply for credit when it is necessary.[3]

Too many inquiries within a short timeframe from creditors will negatively impact one’s credit score. This will classify the consumer as higher risk as the inquiries are a result of the desire to undertake additional debt.

Remember: A high score can provide many benefits. It will make it easier to obtain a loan, lower insurance rates, rent an apartment or even land a job. Follow the tips above to keep those scores high!

[1] Federal Trade Commission. (2013, February 11). In FTC Study, Five Percent of Consumers Had Errors on Their Credit Reports That Could Result in Less Favorable Terms for Loans. Retrieved from

[2] Equifax, Maxine Sweet. (2012, September 24). Five Ways to Rebuild Your Credit Score. Retrieved from

[3] Federal Trade Commission Consumer Information. (2007, July). How Credit Scores Affect the Price of Credit and Insurance. Retrieved from