Do You Know Your Credit Score? If You Don’t, You Need to Pay Attention


August 3, 2017 by Mark Hammerstrom

Listen up:  Your credit score is important and you need to not only know what it is but what your credit report contains.

Don’t even know what a credit score is?  That is not surprising.  Many Americans don’t.  In short it is a numerical score you achieve based on your credit history.

Typically credit scores are based on a scale from 300-850.  The higher your credit score the better.  Amy Summerville, writing a blog on CNBC, says TransUnion (a major credit reporting agency) reports that the average score is 645 which frankly is not all that great.

Banks, auto finance companies, mortgage lenders, even insurance companies and potential employers use credit scores as an indication of a person’s financial health and responsibility.   Repercussions of a bad credit score can include paying higher interest rates for loans to outright denial of credit or financing.

There really are no excuses for not knowing your credit score.  There are many free apps available that track your credit score and provide summaries of the information used to compile it

You are also entitled to one free copy of your complete credit report each year from one of the three major credit reporting agencies.  This is very important as a simple review can ensure that the most accurate information is included and correct any inaccuracies that may exist.

Summerville suggests a few simple actions which can build a strong credit score:

  1. Make your payments on time. Even a single late payment can potentially impact your score.
  2. Don’t utilize the maximum credit you have available. Suggestions are that you use less than 30% of your available credit.
  3. Pay down debt. Simply paying the minimum amount due will only worsen your credit score.  Pay down debt to improve your score and save on interest expense.
  4. Check your score and credit reports on a regular basis. This keeps you attuned to the three items above and up to date on any changes that can adversely impact your rating.

Occasionally we hear that some just don’t want to know what their score or credit history is.  Perhaps they are afraid of what they may find, or it may be too painful to look.  Or it may be because of myths surrounding what can impact their rating.  Summerville summarizes some of the myths:

  1. Late payments on utility bills are always counted. Not necessarily and certainly not automatically. Often late payments are only reported when they are turned over to a collection agency.  This can apply to other types of bills as well.  Nonetheless, it is always better to pay your bills on time to avoid any adverse impact.
  2. Your credit report includes your marital status. Not true.  That said, if you are jointly applying for a loan both you and your partner may need good scores to qualify. Make sure you both know where you stand to avoid surprises.
  3. Checking your score is bad. You checking your score has no impact on how your score is determined. However, too many so called ‘hard inquiries’ directly from lenders can have an adverse impact.  So, don’t overdo it on the number of credit cards or loans you apply for.
  4. Closing an account is bad for your score. Not usually.  If a credit card has a small balance and is paid off there is typically no impact.  High balances and multiple balance transfers, however, can do damage.
  5. Scores impact your ability to travel internationally. No, they do not.  Yet it can impact your ability to finance that trip.  Also keep in mind that it is a good idea to pay off those travel expenses as soon as practical.  If not, large unpaid balances can adversely impact your score.

Credit reporting is an important tool in the collections business and we use it effectively when it is appropriate. It can be a powerful lever to encourage and accelerate delinquent payments from debtors.  Knowing your own score and credit worthiness is important as well.  Take the time to know your score to maintain your own optimal financial health.

United Credit Service, Inc. is a full service, licensed revenue cycle management and debt collection agency in Wisconsin providing effective, customized one on one management and recover solutions for our business partners. Visit our website at, call 877-723-2902, or check out our YouTube video.


One thought on “Do You Know Your Credit Score? If You Don’t, You Need to Pay Attention

  1. Lisa Brammer says:

    Reblogged this on United Credit Service, Inc..

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