Finding and Understanding Your Credit Score

by Stacy Francis, CFP®, CDFA

“Now that real estate prices are falling,” a woman told me over the phone today, “I would like to buy a town house or a condo. But I hear you need really good credit these days, and I have a feeling mine may be pretty bad.”

I asked her what her score was, and she replied that she had no idea. She had never seen her own credit report, and she was not aware that this information is available to her. After some research, it turned out her credit wasn’t bad at all, and she decided to find herself a real estate agent. For the rest of you, here’s some basic information on the very much dreaded credit score.

There are three major credit-reporting agencies: Experian, Equifax, and TransUnion. The information on their reports tends to vary slightly. You can get your credit report for free from

Once you have your reports, you should check them for accuracy. If you see anything that shouldn’t be there, make sure you contact the reporting agency/agencies to dispute it.

Looking at your reports for the first time can be something of a cold shower, as they will list every single late payment you have ever made in your life, as well as how late it was.

The actual score is a snapshot of your creditworthiness at any given time. It is calculated by a machine, and influenced by many factors such as available credit, outstanding debt, length of credit history, and late payments. As these variables vary, so does your score. So the good news is that when you clean up your report, make your payments on time, and reduce your outstanding debt, over time your credit score will be better and better.

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