Here’s What You Need to Know About Your Credit Score

Do you know your credit score? Better yet, do you know what your credit score means? Or how to improve it?

In the wake of the recent security breach from Equifax, it’s even more important to understand your credit score, and how to protect your identity.

It may not all be as complicated as you think!  

What is a Credit Report?

Equifax, TransUnion, and Experian are the three main credit reporting agencies (also referred to as “Credit Bureaus”). Each of them compile separate reports about your personal and financial information. The three reports are usually similar, but not exactly the same.

There are a few elements that make up your credit report:

  1. Public Record Information – if you’ve ever filed for bankruptcy, had a lawsuit, an unpaid tax lien, etc. it will show up here.
  2. Credit Information – this is a record of all your loans and credit
  3. Inquiry Information – this is a record of who else has ever requested to see your credit history
  4. Personal ID Information – a record including your name, current and previous addresses, social security number, etc.

What is a Credit Score?

Your credit report determines your credit score.

Your credit scores change (you have 3 credit scores – one from each of the 3 Credit Bureaus) all the time, depending on your available credit, balances, etc. You should check your credit score only once a year, if you’re not applying for a loan or other credit. If you haven’t checked your credit score recently, you can do so for free at or Be sure to look for any errors and fix them – quickly.

What about FICO?

FICO stands for Fair Isaac Corporation, and is a credit scoring model used by 90% of lenders, including Equifax, TransUnion, and Experian. You can score anywhere between 300 and 850 on the FICO scale. The higher, the better, and anything above 750 is considered very good. Most of the time if you run a credit report, the score you receive will be your FICO score.

What It All Means

So how much does your credit really matter? It takes credit to build credit, so is it even necessary?

If you never apply for a credit card or a loan, and pay cash for everything, then you’ll never have a credit score. This can make some things, like buying a house, more difficult and complicated, but not impossible. Some employers check your credit score during the interview process, but again, it’s not completely necessary to have a credit score.

In fact, it would be much more beneficial to not have a credit score than to have an overwhelming mountain of debt.  

That being said, most people will have a credit score. If you ever open a credit card, or apply for a loan of any kind (including a mortgage, student loan, and car loan), you will have a credit score. And it’s very important to have a good one.

A good credit score can get you a better interest rate on a mortgage, a higher credit card limit, and possibly even better employment opportunities. We don’t advocate you ever max out your credit card, or even carry a balance on it, so it’s important to steward your credit well, even with a perfect score.

How to Improve Your Score

If you don’t have a good credit score, there are many things you can do to improve it. It may take 30-60 days for your improvements to show up on your report, but the effort is definitely worth your time and attention.

First, don’t listen to companies that say they can fix your credit quickly. Never pay someone else to improve your credit. If it sounds too good to be true, it probably is.

Second, pay your bills on time. Automate them so you don’t forget, and be careful to not max out your credit limits. Aim for a balance of 30% or less of your limit. If you currently have a high balance, make payments twice a month.

Third, negotiate if necessary. Late payments will negatively impact your score, so negotiate them if you have a legitimate excuse. Prove your case with previous good history and seek a goodwill adjustment or the removal of a debt.

Fourth, don’t close your cards. This is assuming you’re not in overwhelming debt. Consider a debt consolidation loan if you can get a better rate than your credit cards.

Last but not least, contact Christian Credit Counselors. If you’re dealing with overwhelming credit card debt, they can help. You’ll start with a free debt analysis and develop a plan to living a debt-free life. You can also download their free ebook, with more information and advice on how to improve your credit score!

Remember that your stewardship score is infinitely more important than your credit score, because it has an eternal impact. Guard your heart from the grip of materialism, and order your finances according to Scripture.