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Why should I care about my credit score?

Even if you’ve never given much thought to your credit score, it can have a big impact on your finances.

I’ve never seen my credit score. Do I even have one?

If you’ve ever taken out a loan, or had a credit card or utility account in your name, you probably have a credit score. It is based on your personal financial information and can go up or down, as your financial situation changes.

No one has ever asked for my credit score. Why should I care about it?

Even though no one is ever likely to ask you directly for your score, lenders, employers, landlords, and service providers may routinely reference it as an indication of your creditworthiness. It can determine whether you get approved for a loan, rental lease, or security clearance, as well as the interest rates you pay.

How do I find out what my credit score is?

You can learn your credit score, for a nominal charge, from any one of the three major credit-reporting agencies — Equifax, Experian, and TransUnion. You can find more information on their websites.

How is my credit score different from my credit report?

Your score is based on the information in your report. You are entitled, by law, to a free copy of your credit report, once a year, from each of the three credit-reporting agencies. It’s a good idea to regularly check your credit report for inaccuracies. Get your free request form at www.DoDCommunityBank.com/creditreport.

What can I do to improve my credit score?

The credit-reporting agencies that set your credit score use a formula that considers the following five areas of your finances. By avoiding behavior that negatively impacts your score, you can improve it over time.

Payment History. Paying bills late can have a significant adverse affect on your credit score. Defaulting on a credit balance can be even worse. Always try to pay bills on time.
Length of Credit. The longer that lenders can see you’ve used credit responsibly, the higher your score is likely to be. Keep older accounts open, even if you no longer use them.
Percentage of Debt to Available Credit. Using too much of the credit available to you can hurt your score. Try to keep your account balances below 30% of your credit limits.
New Credit. Opening several new credit accounts in a short amount of time can lower your score. Think twice about opening lines of credit you don’t need, even if you’re doing so to receive a discount or promotion.
Your Credit Mix. Using a mix of different types of credit, rather than just one type, can result in a higher credit score. If all your debt is on credit cards, consider refinancing at least some of it with an installment loan.

The Influence of Each Area on Your Credit Score.*

*”What’s in Your FICO®Score,”accessed on August 16, 2010.

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