Cook Wealth Management Group

How Your Credit Score Adds Up

Check your credit score

It’s a good idea to monitor your credit score at least annually to promptly note any errors (or possible identity theft.) If you don’t know your credit score, you can request your credit report from one or each of the three main credit bureaus* once per year, free of charge.

If you’re looking for a loan in the next year, it’s especially important to stay informed about your credit situation and, if needed, improve your score to get the best possible rate.

Currently, the best rates are offered to those with a score of 760+ (on a scale of 300-850.) FICO, the Missouri-based credit company, discloses five key factors used to determine your score, shown in the pie graph below.

how fico determines your credit score

Want to improve your score?

Aim for best available rate, not best possible score

If you’re over 760, simply maintain good credit practices. Anywhere from 760-850 qualifies you for the best rates available; any tweaks risk the possibility of lowering your score temporarily.

Pick a card

Use one credit card most of time, and make small charges to other cards every few months. The longer you have an active card, the longer your “length of credit history” – a score booster. Additionally, most card issuers now close accounts (which lowers your score) after twelve months of inactivity, so it’s important to use them once in a while.

Pay up

Set reminders on your phone or email account or enroll in automatic bill pay to ensure you don’t miss a payment. While it may help your score to have a credit card, it hurts your score to not pay it off each month.

Curious about your score now? is a secure site that provides an estimated credit score within a 50 point range. Type in a few details about yourself to see how you fare. (Remember, NEVER enter your personal information on a site without verifying it is secure. Make sure the web address begins with https and the site has an SSL certificate indicating encryption, such as a “VeriSign Trusted” logo.)

*Equifax, Experian, and TransUnion

Content derived from: The Quest for the Perfect Credit Score. Ismat Sarah Mangla. MONEY. Sept. 2010.