Michigan State University

Your Score

Benjamin Hall

For the vast majority of adults out there, the term credit score is nothing new. It's the rating between 300-850 that follows every U.S. consumer. 

Unfortunately, most consumers aren't told how their score is being used, configured, or maintained. Since the three main credit bureaus (Equifax, Experian, and TransUnion) serve the interests of creditors and not consumers, they are not incentivized to inform you, least of all "fix" your credit score. 

Passionate credit management activist, finance educator, and advisor-turned-author Anthony Davenport provides a consumer-friendly road map in Your Score: An Insider's Secrets to Understanding, Controlling, and Protecting Your Credit Score. His book should be mandatory reading for anyone who either A. Hasn't ever looked at their credit score, B. Is fighting identity fraud, or C. Wants to game the system to get that new loan, new house, or top promotional loan. 

According to Davenport, "[Your credit score] is an adversarial system that is designed to take advantage of you if you don't know the rules." 

If you still think this book isn't for you, here are some highlights you might not have known:

  • Free credit reports are often inaccurate, some by as many as 50-100 points.
    • Tip: The tri-merge is the #1 report for accuracy, but the FICO score is the most common standard. Any site or offering that provides a report free-of-charge is only providing a best-guess figure.
  • It's extremely important to understand that lenders (loan providers) use any or all three of the credit bureaus to make their decisions. Moreover, the three bureaus calculate your score at different times and different frequencies.
    • Tip: When applying for a loan, identify which bureau is home to your lowest score, then work to identify discrepancies (Ex. name, home address).
  • One of the biggest misconceptions about a credit score is that it has something to do with your income.
    • Tip: It doesn't. Your score is measured by how much debt you carry in relation to your credit lines, your payment history, the mix of credit accounts you possess, and how much credit you've applied for recently.
  •  The average 800-plus credit scorer has nine open credit accounts (not just credit cards).
    • Tip: More data means a more accurate assessment of risk. Maintain 5+ lines of credit and keep your utilization (available credit vs debt) rate between 10-25%. Equally important: Distribute debt proportionally. 

Anthony Davenport's 'Insider Secrets' debunks misconceptions, defines jargon, and lays out countless strategies for protecting that most-vexing of all numbers--the credit score. 

Pick it up today in the Gast Business Library or browse our other New Popular Business books.

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