Credit Score Problems.
As per Indian mindset we have habit of remaining debt less, and thats pretty good. But while in USA, you want to remain good at credit score. Its nothing else but financial protection for future.
You dont need credit today, but what if something comes up in future which wants you to have good score.
Know your score
We presume that we dont need borrow in future and hence dont look into taking care of our credit score. May be some emergency comes up and you need to borrow some money.
There are major credit bureaus to keep track of your credit score: EQUIFAX, EXPERIAN, TRANSUNION.
Each has different methodology of calculating your score, one of them being FICO score developed by Fair Issac Corp.
FICO score ranges from 300 to 850. In most cases it could be 723. If your score is 750 or more, you can borrow easily at best rates. Below 700, its difficult to get best rate. And below 620, its difficult to get loan.
Credit score gets spoiled by paying bills late, high credit card balance. Credit problems usually take 7-10 years to disappear from your record. Even if you have paid all your debt in past, but not remained active lately, it affects Credit history negatively. Recent things count more.
By Law, you can get a free copy of your credit score from three major credit bureaus once a year. Use www.AnnualCreditReport.com, get all three reports and check if there are any issues.
Incase your score is not good; you will also know key reasons, thats your starting point for moving towards better score.