One in four Americans have credit trouble
Discipline key to climbing the mountain
Analysts encourage consumers to take a vested interest in monitoring their personal credit record by reviewing their credit report at least once annually, which can be done for free at www.annualcreditreport.com, said Don Milne, Zions Bank financial literacy manager.
Many times consumers can help themselves repair their credit without spending thousands of dollars to do so by utilizing low-cost or no-cost sources.
“There are lots of free resources out there for people that they can take advantage of,” said Preston Cochrane, president and chief executive officer at AAA Fair Credit Foundation — a non-profit financial education and credit counseling agency in Salt Lake City.
He said having such a low poor score could also have a dramatic impact on a consumer’s cost of accessing credit.
“If you have a credit score of 620 versus a score of 760 — on average consumer debt — you’re probably paying $600 to $800 more a month,” Bingham said.
He noted that one major insurance company has listed the credit score as the top factor in determining their auto premiums — ahead of DUI’s, accidents and claims.
“That’s how dynamic the score has become,” he said. “They have demonstrated that credit scores are a valid indicator of insurance risk.”
He added: “What accounts do you need to keep, what accounts you need to close, what accounts you need to use and what accounts you need to pay down?” Bingham said. “If you get (the answers) to those questions, you’ll win.”
Credit Score Range
800-850 — Superior, flawless credit
760-799 — Very good to excellent, usually receives best interest rates
720-759 — Good to very good, exceptionally creditworthy
680-719 — Average to good, able to qualify for most loans
620-679 — OK to average, could use improvement
580-619 — Below average, requires improvement
500-579 — Very bad, in need of serious repair
<500 — Worst, poor credit risk
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