Saving with your credit score

August 27, 2008 5:18:15 AM PDT
The tightening economy is prompting many people to search for new ways to save money. One important factor has to do with your credit score.

Patty Hasson has dedicated her life to helping consumers get out of debt and save money in the process. She's the president and C-E-O of the Delaware Valley's Consumer Credit Counseling Service.

"The higher your credit score, the less you'll pay in interest for particular loans so if you can get a lower interest rate on your auto loan it could save you 10, 20, hundreds of dollars a month," said Hasson.

But how do you do that? First, you need to understand what affects your credit score.

"The biggest factor that goes into your credit score is how you pay your bills, so make sure you're paying your bills on time," said Hasson.

The second biggest factor is how much debt you carry on your cards compared to your available balance. The higher your debt percentage, the worse your score.

That means you should not consolidate your debt onto one card and close your other cards. Closing credit card accounts is also a bad idea because 15-percent of your score is based on your history with companies.

You're entitled to one free credit report every year from each of the three major credit bureaus. Experts encourage you to get one free report every four months to check for inaccuracies and ways you can improve your credit.

Beware: those free reports do not include your credit score. That you will cost you.

"And one caution I have, be very careful about what score you're pulling," Hasson said.

Most lenders still look at your FICO score offered by the Fair Isaac Corporation, but most credit bureaus offer something called the Vantage score. They have different scales.

Action News has learned of a different kind of score you need to check. It's called the Work Number.

"It has your salary, how often you've gotten paid, year to date what you've been paid and your social security number," Hasson explained.

Prospective employers can use it to verify your employment information.

"You should definitely check it. Anytime someone has information about you, you want to verify that information is correct and if it's not, correct it," she said.

Be very careful when ordering your free report. Make sure you're not getting enrolled in a service charges you.

Also, make sure you're using the one officially designated website -- www.annualcreditreport.com.

ON THE NET:

Consumer Counseling Service of the Delaware Valley: www.cccsdv.org

www.myfico.com

www.theworknumber.com

CREDIT BUREAUS:

TransUnion

Experian

Equifax


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