Understanding and managing your credit score

Your credit score determines how much you pay for life's needs. Knowing your credit score can save you money. Your score is a complex mathematical model that evaluates many types of information in your credit file. This information is used by lenders to determine what interest rate you will receive on loans and credit cards. Here are some ways that can help protect and increase your credit score.

Check your credit report at least annually. You are entitled to one free credit report annually from each of the three major credit bureaus. You can improve your credit scores by taking a close look at your credit reports and charting a plan of action to improve them. And, if anyone is misusing your credit without your knowledge, clues are likely to show up here. For a free report: www.annualcreditreport.com.

Manage your debt wisely. The only true credit score quick-fixes are to pay down debt and to successfully dispute negative information your credit report. The best advice is to manage credit responsibly over time.

Review account statements as soon as you receive them. If your credit card or bank statement is late by more than a couple of days, call your credit card company or bank to confirm your billing address and account balances. Check account statements carefully to ensure all charges, checks or withdrawals were authorized. Consider signing up for electronic statements to ensure your statements aren't lost or stolen in the mail.

Pay attention to your billing cycles. Follow up with creditors if your bills don't arrive on time. If you have past-due bills now, get current and stay that way. Contact your creditors as soon as you know you will have a problem paying bills on time. Try to work out a payment arrangement and negotiate with them to keep at least a portion of the late notations off of your credit reports.

Guard your personal information. Don't carry your social security number with you and never give it to anyone unless they have a good reason for needing it. If you suspect you have been a victim of identity theft, contact your local law enforcement agency. In addition, you may place a fraud alert call the credit reporting agencies at:

TransUnion - Fraud Victim Assistance Division, Phone: 800-680-7289
Experian, Phone: 888-397-3742
Equifax, Phone: 800-525-6285