August  2005      Vol. 14, No. 8  REAP HOME PAGE  A publication of the Center for Rural Affairs    
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Credit Scores -- You've Got One

“You Say You Got A Call; Your Credit Score Says It All”
Put that little phrase in your mind like it was the first line of a rap song. Now sit back and ponder what your credit score is, what that means, how it affects your life, and how to help manage your credit score. Let’s explore your credit score world.

Yes, you’ve probably got a credit score, unless you’ve been stranded on an uninhabited island in the Pacific for years with no contact to the outside world. How do you get one – simple, buy a home or a car or something on a credit card. Never bought anything on installment payments and have no credit cards, but did borrow money from a bank? You have a credit score.

How does your score affect you? It can affect everything – from how you’re hired on a job to the price of your insurance premiums. It can be used to decide interest rates on any money you borrow. The list goes on and on.

Yes, the credit score and the credit report on which it is based undoubtedly impact your life, even when you are unaware.

How Do You Find Out Your Credit Score?
Three companies dominate the credit report business. They are TransUnion, Experian, and Equifax. They collect data on your financial history from credit card companies, commercial lending agencies, public utilities, etc.

These companies examine such things as history of payments on credit cards. Were these payments delinquent? How many delinquencies and how long? How many credit cards do you possess? What are your total obligations? What types of debts are on your record? Do you have any bankruptcy on record, and if so, how long has it been?

Tax liens and delinquency histories are examined. The report details who your creditors are, any court judgments against you, whether any active cases are pending, and any settlements.

How Reliable Are They?
A lot of data is packed in this report, and it can be obtained at your request directly to the credit reporting company. But the bottom line is this; you will have a credit score. You need to be aware of what the score is, how it was determined, and whether it is accurate.

Are they error free? Far from it! The August 2005 issue of Consumer Reports quotes a 2004 survey by the U.S. Public Interest Research Group, which said that 25 percent of credit reports had errors serious enough to cause consumers to be turned down for a loan or a job.

Can these mistakes be erased or corrected? In many instances, yes, but often it’s a tougher job than it should be. If you have a problem, consult reliable financial counselors or legal advisors.

The Bottom Line
Almost everyone has a credit score. It’s like death and taxes; it can’t be escaped, must be lived with, and, fortunately, can be managed. Through managing your credit, you can create a high score which will save you interest money, expand your credit capabilities, possibly lower insurance premiums, and a variety of other positive outcomes. Even if your credit history is a mixed one, establishing a good trend line will go a long way towards overcoming a negative history.

Consumer Reports August 2005 issue provides a more in-depth summary and is a primary source used for researching the meaning of credit scoring. If you have questions, please contact Phil Menke, REAP Business Specialist at 308.784.4948 or by email

To order a free credit report:
The law allows you to order one free copy from each of the nationwide consumer reporting companies every 12 months. The three companies have set up one central website, toll-free phone number, and mailing address through which you can order your free annual credit report.

To order, visit or call 877.322.8228. Please note, your credit score does not come with the free credit report. There is a small charge to find out your credit score.

Source: Federal Trade Commission website

Contact: Phil Menke for more information, 308.784.4948 or
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