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5 Important facts about your credit score

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by: No more debt !
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Date: Sun, 24 Nov 2013 Time: 5:22 PM

Most people have heard of the term, "credit score." Most have an idea that their credit score is used to determine whether or not they will be able to borrow money. What people do not always realize is their credit score may be used for more than simply getting a loan. It might be used in many ways by a lot of different people.

In order to understand how a credit score will impact your life other than when borrowing money, you have to find out who is looking at it. It is a good idea to learn five basic credit score facts, of which you may not have been previously aware, to learn how your credit score is used.

1. Credit Score and Dating

The way that people find another person to date and form a relationship has changed. Instead of looking for a high school sweetheart sitting in the chair in front of you, or trying to meet people at singles bars, the methods of finding someone to date, and forming a relationship with them, have been influenced by the internet. People meet and get to know one another via the internet, these days. At some point, they may decide to meet. "That happens all the time," you may be thinking, "But it still does not explain how does a credit score affect my love life?"

Nearly half the people in romantic relationships have discussed their credit score with the person they're dating. There are those who admit they will not date someone with a low credit score. It is a new way that singles are measuring their potential mates. The credit score has become so significant in dating, that online dating services may screen people based on their credit score. It is another way to determine whether or not a couple will be compatible.

2. Credit Score and Marriage

Married couples share many things. However, that doesn't apply to credit scores. Each of the partners in a marriage is responsible for their own credit score. Everything on your credit report is based on your actions as it pertains to credit. There will be times when one spouse might impact the credit score of the other, such as in having a mortgage in the names of both partners or having a joint credit card. Not all of the credit issues in a marriage will affect both partners. Credit cards, loans, etc. in the name of one spouse will not affect the credit score of the other. Therefore, it is important for you to know how to check your credit score as an individual.

3. Credit Score and Reporting Agencies

So, what is a credit score? There are three main agencies, most often used by lenders, who generate a credit score and report. These agencies are Experian, TransUnion and Equifax. Each reporting agency will generate their own score using their own formula. The scores may not always be the same because different lenders may not report to all three, or they report at different times. It may even be possible that erroneous information might appear on one report but not on another agency's report. With all these variables, you can see why it is important to check your credit scores from all three agencies.

You may also find out that you have other credit scores that are used by different companies and services. For instance, you might have a home insurance credit score, an auto loan score, and a Vantage score. These numbers may also be different from the scores determined by the main credit reporting agencies. Because of all of these different scores, it isn't always easy to answer the question: what is my credit score?

4. Credit Scores and Mistakes

While rare, mistakes do happen. It might be the wrong information reported by the lender or a simple clerical error. Unfortunately, mistakes on your credit report may lower your credit score. It is up to each individual to make sure that their credit report contains correct information. It is their responsibility to make sure any errors are corrected or removed. The credit reporting agencies and the companies that send inaccurate information to the agencies won't know there is a mistake unless you bring it to their attention. So make sure to carefully review your credit report on a regular basis.

5. Credit Score and Fraud

If someone steals your identity, one of the first clues may be a drop in your credit score. If you discover your credit score has been lowered, and you're sure you've done nothing to initiate the change, check further to find out if you have become a victim of fraud. Contact the credit agencies immediately to learn how to quickly obtain a copy of your credit report. They will also provide guidance as to what steps to follow should you discover fraud has been committed against you.

Your credit score impacts your life in many ways. If you don't learn the facts about your credit score, you may be missing out on many things in your life. Take the time to find out why you need to pay attention to these numbers. It could make your life just a little better.

About the Author

Joy Mali is an active finance blogger who is fond of sharing interesting finance management tips to encourage people to manage their personal finances. More specifically, she advocates that people should check credit reports and scores regularly.

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