- How can I start investing for my retirement?
- How can I plan for my children's education?
- How do I develop an investment strategy that supports my lifestyle?
- I have money to invest. Where do I begin?
- As a business owner, how do I plan for my own and my employees' needs?
- How can I lower my tax bill?
- How can I ensure the financial security of my family?
- How can I ensure that my wealth is transferred to my loved ones?
- How can I manage my short-term needs while maintaining my long-term financial goals?
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HOW WE APPROACH YOUR NEEDS
Understanding Your Credit Score
A credit score is a number, based strictly on credit history, created to help creditors weigh the risks they take when they loan money. Your credit score determines whether you can get credit and the interest rate for which you qualify. The higher the number, the better you look to lenders. People with the highest scores get the lowest interest rates. Because your score plays an important role in most borrowing situations, it's good to understand what goes into your credit score.
How Does It Work?
Credit scoring is a statistically-based prediction of how likely it is that a borrower will repay a loan. It acts as an "OK" stamp to lenders that you are a low risk, or raises red flags that you are a high risk borrower.
When you manage your credit responsibly, your credit score goes up over time. A strong credit history will give you a strong credit score.
Income level is not a factor in your credit score. You could have a low income and a high credit score. Or you could have a high income and a low credit score. It just depends on your credit history.
What Are Common Scores?
According to Fair, Isaac and Company, Inc., the developer of today's most commonly used scoring system, scores can range from 300 to 850. Most people score in the 600s and 700s and scores break out along these lines:
| Credit Score | Percentage |
| 499 and below | 1% |
| 500-549 | 5% |
| 550-559 | 7% |
| 600-649 | 11% |
| 650-699 | 16% |
| 700-749 | 20% |
| 749-799 | 29% |
| 800 and above | 11% |
No Credit Score Lasts Forever
It changes over time as your credit maintenance changes. Depending on a variety of factors, your score can go up or down at any time. In fact, every time you apply for, use, make or miss a payment on a loan or credit card, you add on to your credit report, and either raise or lower your score.
What Goes Into Your Score?
A variety of factors gathered from your credit report make up your credit score. The categories consist of:
- Your payment track record
- The amount of debt you owe
- How long you've used credit
- The number of recently opened accounts and inquiries made by creditors
- The types of credit you currently use
If you are concerned about your credit history, your local financial advisor may be able to help.
