Your credit score may be the most important piece of financial information, and a bad score can prevent you from being able to rent an apartment, get a job, and it can even raise your auto insurance rates. Unfortunately, there are millions of people suffering from a low credit score not because of their bad credit behavior, but because they don’t regularly review this information.

Fraud, identity theft and simple errors are highly prevalent, and it is almost guaranteed that you will be a victim one or many times in your life. Hackers crack into department store records to steal your credit card information, dumpster divers fill out your credit card applications, and Social Security Numbers are sold on the black market. These things happen, and by getting your free credit rating online you can review your credit score and report to make sure you are not a victim of these cases.

Beyond that, the credit reporting agencies do not always get your information accurately on your credit file either, and that can effect your score. These agencies have billions of transactions and information to manage for millions of people, which is not an easy task. Because of the complexity, these reporting agencies often get the wrong information on the wrong credit reports. That means there could be accounts on your file that don’t belong there, and there could even be bankruptcies or judgements.

This is not uncommon at all. In fact, one out of every four credit reports contain information serious enough to effect your score. The good news is it is pretty easy to get this wrong information removed from your report. Once removed, your score should increase as well, which you can then use to renegotiate your loans, refinance your mortgage, and reduce your auto insurance.

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Your credit report includes information, such as:

• Your Social Security Number, employers, and your address
• You past and present credit accounts and loans
• Public records items, such as judgments and bankruptcies

This is, in essence, your credit history that is listed on your credit report. The information on this file goes back 7 years, but can list some forms of bankruptcies for as long as 10 years.

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Your credit score, on the other hand, is a number that is assigned to you based on the information listed on your report. You are given points for good credit behavior, and points are taken for bad behavior.

What is considered good and bad behavior? The biggest part of your score is determined by your payment history — how often you pay or don’t pay your bills on time. Your score also looks at the length of time you’ve had credit accounts open, how much of your credit you use, and how often you try to get more credit.

Your score is used not only to determine if you can get approved for a home or auto loan, but it is often used by companies to gauge your level of responsibility. For example, employers often check your credit during the screening process, landlords will most often want to know your rating, and your auto insurance company may even use it to determine your rates.

The good news is that your credit score is not set in stone and it can always be improved. Even a poor rating can be turned around into excellent credit by disputing items and making a couple changes in your financial behavior.

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Few small business lenders will consider both your personal credit score and your small business credit score, particularly with a young company, but for the most part they are two completely different things. In most cases, major lenders and banks will only consider an established business credit history and will not take your personal credit rating into consideration. In other words, you can a have near perfect personal credit rating and a bad business credit score, and you will not get approved for the loan or line of credit that your business needs.

It is critically important that as soon as a business entity is established that the business begins to build a credit history. This is done just like personal credit:

• Open credit card accounts to establish history
• Use revolving credit regularly while keeping debt ratios low
• Maintain installment loans in the business’ name and make on-time payments

The good news is for small business owners who have poor personal credit scores. This gives them a chance to start over by building and maintaing a high credit score for their business.

It’s a critical piece to your business’ success, no matter how big or small you are. Be sure to think long term and establish a history of repaying your debts so there is now problems in the future when you are ready to expand.

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When you request an instant online credit report there are a few things to consider as well. With the options available, you should have no trouble finding a provider that will not only give you your credit sore for free, but you should also be able to receive all 3 of your credit reports at no charge as well. This is important as you want to regularly review these reports to ensure that you are not a victim of identity theft.

It’s not uncommon for information that does not belong on your credit report to be listed on this file as well. Review this information closely and double check for accuracy. Any information that does not belong there by law must be removed by the credit reporting agency.

When you request your instant online credit report, you also want to be sure that you are also receiving a copy of your credit score that most lenders go by. There are many variations of your credit score, so it is important that you utilize a provider that will give you the most common types of credit scores. This is usually not an issue, but something to consider.

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There are, in fact, three credit reports that are associated with every American citizen. All three will have slightly different information on them. By law, your creditors and lenders only need to provide accurate information, but they do not necessarily have to provide any information at all. They can also select who they provide that information to.

For example, the 3 credit report agencies are Equifax, Trans Union, and Experian. Let’s say you have a Visa credit card and a car loan. One month you accidentally forget to pay your Visa bill and for the past 3 months  you have not been able to make a car payment. Your credit card company may report the late payment to all three agencies. Your car lender, however, may only report the information to Experian and Equifax, but not Trans Union.

The same holds true for good credit behavior. It is possible that you have a credit card that you have been paying on time for several years, yet none of that information shows up on your credit reports. That is why it is critical to not review all three credit reports thoroughly and make sure all good information is provided on those reports. If it is not, call your lenders and ask them to submit that information.

When you get your online credit report, be sure that it includes your Experian, Equifax and Trans Union reports. This is especially true if you have not reviewed these files within the past 6 months or more.

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First, about the credit score. There are probably hundreds of companies that provide some sort of credit rating. They all try to come up with some sort of formula that provides lenders and creditors with a number that shows how responsibly of a consumer you are. These companies look at your credit history and provide a rating, and that service is sold to banks, auto dealers, landlords, employers, etc.

But realistically there is only one credit score, known as the FICO Score. This is the number that is provided by the Fair Issac Corp, which is used by 75% of leading lenders. In other words, the FICO Score is the only one you really care about. This is the industry standard.

Now for the credit reporting agencies… they will sell you your credit score for a fee. There are many services that provide your credit score online, but you want to be sure what you are receiving is actually your FICO Score, since it is the one that the people who are doing a background check will also request.

If you’re wondering how the 3 credit reporting agencies differ, here is how they work…

There are 3 credit reporting bureaus: Equifax, Trans Union, and Experian. These agencies have the task of managing billions of transactions for millions of Americans. They try to accurately provide a report that shows your history of using credit over the past 7-10 years. If you opened a credit card 5 years ago, it should be on that report. If you were late on your mortgage or rent, it may show up on that report. If your car was repossessed, chances are it is on your file.

What determines the information that goes on that report is up to the creditors/lenders. They must report the information to the agencies, but they are under no obligation to do so. In other words, if you are late on a payment, they can choose whether or not to report that information. Furthermore, they can choose to submit that application to all 3 reporting agencies, or just one of them if they want.

What they are obligated to do, by law, is provide accurate and factual information.

That doesn’t however, mean that this always happens. Sometimes human error is made and the wrong information is reported or the bureau makes a mistake with listing this information on your report. As a result, it is quite common to have information on your report that doesn’t belong there, and it can hurt your score.

That’s why the best thing you can do it regularly review your credit report and score to make sure it is accurate.

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However, ever since the credit crunch, the minimum score to obtain credit in general has raised significantly. In the past, for example, a 720 credit score was considered excellent credit by most companies. Today that same score would only classify as good credit, simply because the banks and lenders are being more strict with who the give money to.

It is important to note that when you order your credit score online to be sure that you are actually receiving your FICO Score. There are others that are very similar, but the FICO Score is the one used by most creditors. It makes sense to see what they see.

If you need credit, minimum score should be about 700. If you are below 700, there are certainly some easy things you can do to bump yourself up closer to good or fair credit range. For one, when your score is lower, that means there are that many things that you can fix. If you have good credit and want to get excellent credit, it becomes a little harder because there are fewer errors and negative items to work with.

Going from bad credit to good credit is easy, but in order to improve that score you must know exactly what your score is. Once you have that piece of information, you can start to raise your credit rating, get the loan you need, and save thousands of dollars by having a much lower interest rate on your loans.

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How to Improve Your Credit Score

Your credit score is calculated by the information that is on your credit report. This file contains a history of the past 7 -10 years of your financial behavior — good and bad. It lists all the times you’ve made a payment on time, how many times you’ve applied for credit, how many times you’ve been denied, and of course all the times you didn’t repay your debt.

The number one thing that affects your credit score is if you made your payments on time or not. If you have numerous delinquencies on your file, don’t worry. There are not only ways to remove those items, but the recent information on your file affects your score more than older information. That means that by making changes in your behavior today, you can start improving your credit score. Just by starting to pay on time could dramatically improve your score.

That’s why one of the most important things you can do before improving your score is to get your finances in order. You must make sure your expenses do not exceed your income and put an end to using your credit cards excessively. If you don’t, all the work you do to fix your credit score won’t matter because it will just be damaged again.

Take a good look at your finances and get that in order first. Once you have made a commitment to stop using your credit cards excessively, then you can move forward. Note that this does not mean to stop using your credit all together. It is good to use it at a minimum and pay off your balance every month. This will build a good credit history.

If you are paying your bills on time, there are a few other things you can do to improve your credit score. For instance, you’ll want to closely review all 3 credit reports. Each report may be slightly different in the information that it lists, and according to recent studies, 25% of all credit reports contain information that doesn’t belong there. Find those errors and fix them, and you could see a quick and easy improvement in your credit score.

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How to Establish Credit

1. Find Your Cu rent Credit Rating: It is possible to have no credit history, but there’s a good chance you have some information on your credit report even if you have never owned a credit card. This file includes previous addresses, employment history, a list of companies and people that have tried to pull your credit, and instances when you have applied for credit. While most of these things won’t affect your score in any way, it is still a good idea to know where you stand. Request Your Credit Information
2. Piggyback: The easiest and quickest way to establish credit is to use a technique that is called piggybacking. By piggybacking off your spouse’s or parent’s credit, you will immediately establish credit yourself. To do this, the person you want to piggyback off of has to add your name as an authorized user to one of their credit lines. This is as simple as making a phone call. Note that this works best when piggybacking off an immediate relative.
3. Get Credit: Next, try to obtain a credit card, even if it is only for a $250 credit limit. If you cannot get approved for a credit card, apply for a secured credit card, which is a card that requires some sort of collateral – usually in the form of cash. Once you obtain your card, use it regularly but with moderation. Charging $0.10 is enough to build a credit history. Usage and paying off the bill in full is much more important than how much you use. In fact, the closer you get to maxing out your credit limit, the more it will hurt your credit score.

Follow these three simple steps to establish credit and you’ll have a credit history in no time. Before you begin, request your current credit information. It is completely possible that while you may think you do not have credit, that there is wrong information on your report that could make you have bad credit. If that’s the case, you’ll want to get that fixed right away.

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2 Ways to Get Credit Score

There are really 2 major ways to get credit score rating and all your information for free:

1. Get Denied for a Loan: Obviously not the most practical way to get credit score, but it works. If at any time you are denied a loan, credit or even renting an apartment because of your rating, you are entitled to receive the information they used to make that determination.
2. Order it Online: There are a few online services that will provide you with your credit score. Just make sure that that you are receiving your FICO Score. There are many different companies that try to come up with a consumer credit rating, but the FICO Score is the only one that really matters. Get Credit Score Here.

Once you have your rating, you can get a good idea of your abilities to get a loan and figure out what you need to do to improve your score. This information is probably the most important piece of financial information that you have, and it should be reviewed at least every 3 months. It can be used by a potential employer, landlord, and will either help or hurt your ability to get financing for a car or home mortgage.

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