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					                                 Credit Scores Can Have a Big Impact
                           As published in the Brainerd Dispatch. December 17,2006

Most people know that a credit score is important when it comes to getting a mortgage. But did you know that
it also could affect your ability to get a job? Or rent an apartment? Or get a good rate on car insurance?

"The credit score is really the key to your financial life, and we're not just talking about getting credit," said
Travis Plunkett, legislative director of the Consumer Federation of America.

Credit scores are now used by a host of people and businesses, including lenders, employers, insurance
agents, landlords and utilities. That's why it's so important to maintain your creditworthiness - even when
you are in your 20s and 30s, have just launched a career and are still paying off student debt.

There are several scoring methods, but the most common is the FICO score, developed by Fair, Isaac and Co., a
leading credit analysis and risk management firm, FICO scores can range from 300 to 850. Half the population
scores above 720, while 15 percent come in below 600, according to Andy Jolls, vice president for Fair Isaac's, which sells credit-monitoring products and provides information on scoring.

Simple mistakes, such as missing a single bill or a loan payment or charging to the limit, stay on your records
for years and can cost you in many ways, including tens of thousands of dollars in higher interest rates over
the life of a loan.

So - what exactly is a credit score?

It's a number that reflects how likely you are to repay your debts.

The score is based on your credit report, which lists all your debts, including credit cards, car loans,
mortgages and student loans, and your repayment history. Some factors, such as whether you pay your bills
on time and how much debt you have, carry special weight.

The best way to achieve a good score is to establish credit by having a few credit cards and loans, then paying
your bills on time and keeping your debts at a minimum.

On the flip side: You will lower your score if you have more than six credit cards, even if you don't use them
all; if you use more than 65 percent of your available credit; or if you frequently apply for new credit cards or
lines of credit.

Don't ignore doctor bills, library charges or phone bills either. These can be sent to collection agencies, and
that can really hurt your creditworthiness, said 'Gerri Detweiler, author of ''The Ultimate Credit Handbook"
Even a $25 unpaid bill can cause your score to "drop like a rock," she added.

"Missing a bill payment on a credit card doesn't amount to just a $5 or $10 finance charge," said Matt
Fellowes, a Brookings Institution scholar who has studied credit scoring. "It can amount to a world of
roadblocks going forward."

Although delinquencies stay on your report for seven years, you can start raising your score in as little as six

Here's how to begin:

First, review your credit reports to see what's listed there and to make sure it's all accurate. You are entitled
to a free report from each of the three main agencies, TransUnion, Equifax and Experian, once a year. You
must go through to obtain the reports without charge.

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