SavvyPoll Number Five

A good credit report, generally considered to be a FICO (Fair Isaac Corporation) score above 700, can be a valuable asset. Note that the FICO range is 300 – 850. Most significantly, with a better FICO score you can get superior interest rates on house or car loans. Unfortunately, it is estimated that about 60% of information found on credit reports is either incorrect, outdated, or both.

Know the ScoreConsidering that even the most seemingly insignificant errors can result in you paying a higher interest rate or cause you to be denied a loan completely, it is in your best interest to ensure that you check your credit report regularly for completeness and accuracy. I recently checked mine offered by one of my credit card companies as a free service.

Check with yours to see if they offer such a service. If not, visit annualcreditreport. This central site allows you to request a free credit report once every 12 months from each of the nationwide consumer credit reporting companies.

Once you receive your credit reports from the three consumer credit reporting companies – Experian™, Equifax®, and TransUnion® – start by checking your personal information such as Social Security number, the spelling of your name, current address, previous addresses, and date of birth for completeness and accuracy.

Check here for an earlier post that discusses what to check for once you receive your credit report. So where do you stand? I’ll kick off the poll by noting that my score currently stands at 764.

This week’s SavvyPoll asks, “What is your FICO (credit) score?”

A. 300 – 500

B. 501 – 600

C. 601 – 700

D. Over 700

The results are in…

Poll #5

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.

22 Comments

  1. D, where is the over 800 option?

    • Your answer is noted, William. As to the question of, “where is the over 800 option?” I considered it, but determined that over 700, which is generally considered good credit, was sufficiently high enough. Thanks for stopping by and participating. The results will be released later today.

  2. A reader on Twitter responds…

    “When I last checked mine score was in ‘C.’ But then the last time I looked at it was a year ago.”

  3. D…

    But the last time I checked was two years ago…(note: my credit cards have been paid off and cut up for 2 years…for me personally, using credit is the devil lol)

    • No doubt that debt is the Devil. As I have noted a number of times – here, here and here – debt is a huge impediment, if not the most significant, to attaining wealth.

      Even though your credit cards are paid off and you don’t use them, there could be other negative information that has crept into your report. I certainly can’t hurt to check on a regular basis, particularly since it can be done for free.

      Thanks for stopping by and responding, Char. Check back Wednesday for the results.

      • I’m actually interested in the “letting the credit score drop to zero” idea from Dave Ramsey (sharp guy!)… Have you heard about it? The only debt I have left are student loans, so it’ll take a few years before the zero thing can happen. Thanks for the suggestion though 🙂

        • I’m not sure it is technically possible to have a credit score of zero. My understanding from everything I have read is that the minimum score is 350. If Dave Ramsey has stated that his FICO (credit) score is zero – I’m not sure that he has – he may have been speaking more for effect (i.e. do not use credit) than actually advocating that people try to drive their credit score down to zero.

          What he does say in an article, found here, is that, “After killing all that debt, your credit score will become ‘indeterminable’ This is great news! By this point in your life, you haven’t taken out a loan in years, you’ve saved a ton of money, and you’re paying cash for everything. So you don’t need a credit score, anyway, since you don’t plan on using credit!”

          Trying to achieve, and then subsequently maintain, a debt free lifestyle is certainly a worthwhile goal; and while it is true that a credit score – or absence of one – is irrelevant if you do not plan on ever using credit, there is still value in ensuring that your credit report is accurate. If you find inaccurate or erroneous information on your credit report, it could be an indication your identity has been compromised. Just a thought.

          • That’s quite a thought 😉 yep, I’m not interested in using credit, although society (especially businesses–rental car agencies, etc) make it difficult…
            I guess he says it for effect but I have heard guests on his show say theirs was zero, and he has said it more than a few times, either way you get my point whether indeterminate or zero. 🙂
            I will still be able to apply for a loan on a home with an indeterminate/zero credit score because manual underwriting still exists at most credit unions, and I’ll still get competitive rates due to my savings and employment history.

            • Good stuff, my friend. No doubt, as you noted, some business transactions are harder without a credit card. However, clearly it can be done if there is a desire to avoid credit completely. Thanks for adding to the conversation and providing food for thought.

  4. We don’t have FICO credit score in Canada, at least it’s not called FICO, but we do have credit score. I don’t know what mine is. I’m thinking of getting it but it costs $ to get the score. Not much $20 – $30, I think, but still.

    • I was thinking of adding something that addressed the credit reporting/scoring systems of our cousins up north and across the pond. Perhaps I will do some quick research and update the post.

      Did some quick research…

      Canada shares two of the three major credit-reporting agencies with the United States: Equifax Canada and TransUnion Canada. One slight difference, whereas in the U.S. the scoring scale is 300 – 850, in Canada it is 300 – 900. Fortunately, it is possible to obtain credit reports for free.

      The Canadian Office of Consumer Affairs (OCA) is good place to get more information and get started in checking a credit report for Canadians.

      • Thanks J! I understand that you can get a credit report in Canada for free but to get the actual score you have to pay. Who would have thought the ranges would be different? Good info and thanks for the link to OCA. 😉

        • You are welcome, my friend. It is absolutely savvy to know how creditors rate your credit worthiness.

  5. Unfortunately and admittedly B. I made some serious mistakes in my youth that have been a huge weight on my shoulders for almost a decade.

    However, because of my hard work and refusal to give up, I will be paying off some really old debts at the end of the year and I expect things to turn around.

    • I was in the ‘B’ group myself a few years back. Not only had I been delinquent on credit card payments, I found out after a long period that a family member had been using my SSN to secure medical treatment for another family member. Since I did not check my credit report for a long period, I did not know that someone else was accruing medical expenses against my credit…and of course they were not making the payments. Between paying off the health care related debt and getting caught up on credit card payments, it took awhile for my score to come up.

      As you note, perseverance and focus are required when you find yourself in a seemingly inescapable hole.

  6. D , I would rather have an A+ in paying cash for everything.

    • Your response is noted. Cash is absolutely king!

  7. D.

    • Thanks for stopping by, Paul. Your response is noted. Check back Wednesday for the results. Also, look out for SavvyQuiz #43 tomorrow and the latest SavvyInterview – a really great, insightful interview with a wise, experienced investor – on Tuesday.

  8. A Google+ reader responds…

    “D. Over 700 but it is difficult to get credit without an income.”

  9. C.

    In January I pulled all three reports via annual credit report dot com. I found erroneous information in the Equifax report. Work/ed/ing to have the discrepancies removed or updated.

    • Your answer is noted. A few years ago, I got around to checking my credit report – after not having done so for a long period – and found a number of discrepancies. In a relatively short period of time, my credit score increased as those negative (incorrect) entries were addressed. The effort to check a credit report and deal with inaccuracies is well worth it when the benefit, access to credit at better rates, is realized.

      I will be interested to see how many people respond to this poll. I suspect it may be fewer than the first few as some may be reluctant to divulge that information, particularly if they feel their score is below average. We’ll see.

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