By Roger Gray
If you don't know your credit score and how it's determined, you need to find out.Your financial future depends on it.
It started back in 1958. And as you might imagine, it was a pair of mathematicians named Fair and Isaac that developed the so-called FICO or credit score. And it can make you, or break you.
Scott Nelson is with Primary Residential Mortgage. "They have to watch what they spend," he warned. "They can't go out there and run up a credit card on Christmas and not make the payments."
Michael Ogg of Austin Bank agreed. "The obvious thing is that you pay the bills on time," Ogg said.
Nelson told us, "I had one gentleman that I talked with that, he had a 30 day delinquency on a credit card that reported, and it lowered his credit score 50 points, 50 points!"
The number of inquires on your credit can also affect your score. For example, when you try to buy a car.
"I'll pull up a credit report and it shows all these inquiries within a few days," said Nelson, "where that car lot has shopped them around to all of their bankers to see if they qualify."
Ogg explained, "that report may go out in a shotgun approach, and you may have five or six inquiries in one day."
And those are red flags?
"If you get too many," Ogg told us. "Again, I'm going to say this over and over. I can't tell you how many too many is."
And that's the confusing part. The people who use your credit score have no idea how it is determined. The credit companies won't tell them."
Ogg said, "I can't sit down and tell you this is the reason you have a 712 credit score. I can't do it."
"People need to know more about what impacts their credit and that credit score," Nelson adds.
"There's a formula," said Ogg. "But they won't tell you how they do it."
Nelson agreed, "You have no idea. Why is Experian showing me having 754 and why does Equifax shows me with a 658?"
Ogg explained, "I can't tell you that because they're not going to tell you that."
And it's not just interest rates on loans, but your car insurance.
"If you've got a good score, it may affect the rate," said insurance agent Tom Sorrels. "If you've got a bad score, it may double the rate."
