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3 Things I Wish I Knew About Credit Scores

This is a sponsored conversation written by me on behalf of Discover Financial Services. The opinions and text are all mine.

3 Things I Wish I Knew About Credit Scores-Do you know what your credit score is? I thought I knew mine, until I was denied credit due to a low credit score. Find out why you should check your credit score regularly.

Do you know what your credit score is? I’ll be honest, for several years I would check my credit report sporadically, if at all. I thought I was in good standing until one day I was denied credit. I needed a new car to accommodate our growing family, so I stopped at a local car dealer to test drive a few cars. When I narrowed down the vehicle I wanted, I found out I couldn’t purchase it because the car payment would be a lot higher than what I budgeted for. Why? Because my credit score was low and the only financing I could secure had a high interest rate attached to it.

I made the mistake of settling for a car that I didn’t even like, which also wound up breaking down shortly after I paid for it. After that terrible experience, I remember feeling frustrated and embarrassed, but also determined to find out why my score was so bad. I found out I had errors on my credit report that I wasn’t even aware of. Even minor things on your credit report can have a huge impact on your credit score and prevent you from obtaining credit, including a mortgage loan. Today I’m sharing three things I wish I knew about credit scores that could have saved me from this bad experience.

3 Things I Wish I Knew About Credit Scores

1. Not all credit scores are created equal

I’ve heard people suggest websites that give a glimpse into your credit score from one of the three major credit bureaus. What they don’t mention is that many of these sites are not providing you with a FICO® Credit Score. A FICO® Score is what more than 90 percent of lenders will use to determine your creditworthiness when reviewing your credit. By using a service that doesn’t provide a FICO® Credit Score, you are running the risk of not having a true picture of what your true credit score looks like.

2. A low credit score can cost you thousands of dollars

Most mortgage and auto loan lenders will offer you an interest rate based on your FICO® Credit Score. If your credit score is low, you will have to pay significantly more than someone who has a good credit score. Even if you don’t use credit, it doesn’t hurt to keep your credit score in a good range. Why? Because even insurance companies are using your credit score to determine your premiums.

3. Too many inquiries can affect your score

I didn’t know this when I was a young adult, but applying for credit offers can lower your credit score. Even if you have great credit, don’t get sucked into the department store game and apply for store credit in order to get an instant discount. It may hurt your credit score, and it could remain on your credit report for up-to 2 years.

Credit scores are just as important as what you find on your credit report. With identity theft on the rise, it’s crucial to stay informed about the state of your credit. If you want access to your FICO® Credit Score for free, check out Discover Credit Scorecard. This free service enables everyone to check their FICO® Credit Score at no cost, including those who are not Discover customers.

I recently used this service to access my FICO® Credit Score, and I also received a personalized credit profile highlighting some of the components that make up my score. The profile allows me to see which areas I could improve upon. Keep in mind that Credit Scorecard is a “soft pull” of one’s FICO® Credit Score, meaning it will not impact your credit score in any way.

When was the last time you checked your FICO® Score? Did you learn anything new from today’s post? I’d love to hear from you!

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Neyssa

Sunday 25th of September 2016

Ooh, this is so true. Having a terrible credit report haunts you big time. Especially in the renting market. We're currently struggling with this. When we find a diamond in the rough of a rental, we are quickly let down when they want great credit scores. This leads to way higher rent for the same for the same neighborhood and square footage.

Jesenia Montanez

Monday 26th of September 2016

Hi Neyssa. It's sad that most fail to look at the overall picture and go beyond a credit score. I hope you find the perfect home for your family, and most importantly with fair rent. Thanks for stopping by! :)