Credit Score Confusion: What You Need To Know

Al Sunshine
Reporting

(CBS4) MIAMI Your credit score may be one of the most important numbers to know, but a new survey reveals an alarming lack of understanding among consumers about their scores and what you don’t understand could cost you more than you think.
The report from the Consumer Federation of America points out the pitfalls to watch out for when obtaining and using your credit score, which is not the same thing as a credit report, but does reflect your credit worthiness.
The survey from the Consumer Federation of America found only one quarter of Americans know what a good credit score is and most people don’t even know their score.
Not knowing your credit score could cost you.
“You may be denied utility service, may even be denied a job. You’re looking at potentially paying tens of thousands of dollars a year unnecessarily in interest charges,” said Stephen Brobeck from the Consumer Federation of America.
So what is a good credit score? It’s anything above 700. Anything below 600 means you pay higher finance charges on items like a house, a car and even your credit cards.
What lowers your score? Late payments. In fact, just one late auto payment could lower your credit score by as much as 100 points. Other factors include too much open credit and even your credit card balance.
“Don’t go over 50 percent of your credit line on any credit card,” says Brobeck.
But by making a few changes in your spending and bill paying habits, experts say you can raise your score and potentially save thousands of dollars.
You can also obtain a free credit report once a year, but a credit score from one of the three credit reporting agencies will cost about $15.00.
Click Here to get a free credit report.

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