Gone are the days when a hopeful couple sat across the desk from their local banker anxiously awaiting his decision on their loan application. Today, the fate their loan and the rate of their interest hinges on a computer-generated number, their credit score.

 

 

The FICO credit score reflects dozens of parameters in one's financial history. For years, this number-named for developers, Fair, Isaac & Company-was a tight guarded secret. Congress has now secured your right to know - take advantage if it.

• Score 700 - 850-smooth loan process; best interest rates
• Score 550 - 699--medium risk; higher interest rates
• Score 300 - 549-sorry, no loans or credit cards

Before you talk financing, send for your credit report and FICO score. If there are errors or other surprises, contact creditors to make corrections or negotiate settlements. Also, be sure to notify the credit bureau of your dispute.

Legitimate black marks on your credit won't disappear quickly. (It takes seven years; ten for bankruptcy.) However, time and your diligence can turn things around. Lenders will give recent responsible activity due consideration.

In our credit-driven society, taking charge of your credit should be an on-going process. Your FICO score is a snapshot in time, not set in concrete. Review it each year for errors that may have crept in and to monitor your progress. You have the power to know it, raise it, and maintain it.

• Pay all bills-and pay on time
• Maintain 2-4 credit cards
• Close unused credit cards
• Keep balances well below the limit
• Pay more than the minimums
• Establish long-term credit history

• Too many credit cards or zero care
• High non-mortgage debt
• Delinquent accounts
• Frequent job or address changes
• Charge Off's (bills marked uncollectible)
• Bankruptcy