How to understand your credit score

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I find that some of the most educated and experienced people I know don't understand how credit scores are determined and maintained. It seems that this score which essentially controls your ability to achieve the "American Dream" is a mystery to most people. The slew of advice makes it even harder separate the wheat from the chaff. Thankfully the Today Show has provided some wonderful information to help inform consumers about their credit score.Having recently purchased a vehicle I can personally attest to how important it is to know your credit score when seeking financing. We mistakenly financed through the dealer and went through several rounds of negotiation during which they tried to say we had returned a C credit rating on their in house scale. Needless to say our credit score actually sat at the bottom of their "A" level even though they wouldn't admit it. We ended up refinancing with our local credit union saving a load of money on interest, fees and GAP even after any penalties associated with our dealer sponsored loan. As an additional take-away if your dealer tries to shaft you on the loan process it may be a sign they are also selling you a lemon, which is exactly what happened to us. The moral of the story is to know your credit score.

You will be in a much better financial state if you know your credit score and understand how your actions influence it. You can pull your credit report for free from each of the big 3 reporting agencies once a year at AnnualCreditReport.com but you'll need to pay to get your FICO score. Occasionally you can get this cheaper by visiting your bank rather than through third parties. For the love of god don't go to FreeCreditReport.com, if I have to listen to one more commercial featuring the guitar playing pothead lamenting his crappy job or car all while claiming that just knowing his credit score would help him, I'll throw my TV out the window!
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