What Does My Credit Score Mean?

By Michael Peterson
In October 12, 2004

Do you know what your credit score means? Really, do you? You may want to make sure you are perfectly clear on that, because The Consumer Federation of America reported in September of 2004 that of 1,000 Americans they surveyed, only one third understood that their credit score measured their likeliness to pay off a loan. Today, more and more businesses are checking credit scores as a way to assess risk. Credit scores are imperative to qualifying for a mortgage, and a bad credit score can even prevent you from getting basic services such as a phone line. To be a wise consumer, it is important that you know your score and what it means to you, since it has a large influence on your life.

A credit score is sort of like your adult version of a report card. It tracks your performance in incurring debt and paying your bills on time. You want a high score, because it shows that you are responsible about your finances and can be trusted to repay loans. High scores can get you lower interest rates on credit cards and mortgages. But these days your credit score may be evaluated for many other reasons, from applying for a new apartment, making deposits on utilities, to getting a new job. Read More …

Michael Peterson

Mike is the author of “Reality Millionaire: Proven Tips to Retire Rich” and he has been published in a variety of local and national publications including Entrepreneur Magazine, Deseret Morning News, LDS Living Magazine, and Physicians Money Digest. He holds a B.S. in business administration from the University of Phoenix.