Six Ways to Repair Your Credit

In a time where foreclosure rates are steadily rising, gas prices are higher than ever, and COLA payments have yet to rise to meet the actual cost of living, many Americans are pulling out their bank statements and credit card bills trying to analyze where they've gone wrong. More than that, they are trying to find a way to get back on track. Where should they start?

The first place to start, when trying to undo damage to your credit, is to find out what your credit score is and then finding out why this score is so important.

Simply stated, your credit score, or FICO score, is a measure of your credit history. It is arguably one of the most important pieces of information in your financial life. The reason this score is so important is because it can be the deciding factor for if you get approved for a loan or not, if a landlord will accept you as a renter, and even if an employer will hire you. The higher your FICO score is the more appealing you are to lenders. This can make a difference in what interest rates and loan terms you will be offered, which, in turn, can save or cost you money. A low FICO score can even mean you are unable to get a loan to purchase a car, a house, or even take out a small loan for home repairs.

Credit scores range from 300-900. These numbers basically represent your credit worthiness. The higher your score, the more financially responsible you are deemed to be. Most people's scores fall somewhere in the middle, between 600 and 700. If you apply for a home mortgage loan and the lender does a credit check and sees that you only score a 450, the chances of you being trusted by the lender to pay your monthly payments is quite low. Meaning, you will likely not be approved for a loan. However, if your credit check reveals a 750, this number will be much more reassuring to any lender entrusting a sum of money to you. This credit score number shows that you have been financially responsible, and are of low risk.

You should check your credit score once a year. Doing this can help make sure your identity has not been compromised and to be sure no mistakes have been made that will negatively impact your credit rating. Checking your FICO credit score does not hurt your credit rating. Inquiries made by a consumer about his or her own credit score do not count in any way towards lowering or raising one's credit score, however, having credit card companies or mortgage lenders do more thorough

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