Credit Report Scoring

In a previous post I suggested getting and perusing a copy of our credit report to check for accuracy.  Enquiries were made as to how to obtain the actual credit score.

Although by law everyone is allowed a free copy of their credit report once a year from or, unfortunately these companies charge extra to get the credit score.  For about $24 you can get a copy of your credit report and credit score combined.

Related: What Does Your Credit Score Really Mean?

Beware of some websites that claim to offer free credit scores.  They may sell your contact information to online marketers of credit monitoring services.  Also, read the agreement carefully to make sure you will not be automatically charged a monthly membership fee.

Read the fine print of any site that says “FREE.”

Credit Score

Your credit score is a complicated series of calculations based on your credit history.  The final number will be somewhere between 300 and 850.  The average credit score is about 650.

A score of 720 or higher is considered good, and most lenders will give you their best deals.  One under 600 will leave little or no negotiating room, so it pays to do whatever you can to increase the credit score – paying on time, not going over the limit, not opening a lot of new accounts, keeping balances below the credit limit, etc.

Related: Best Balance Transfer Credit Cards

I previously mentioned closing any accounts that are not being used.  To clarify, don’t close all your accounts.  Keep at least one or two revolving credit accounts open (especially ones that have been open for a long time), and use them periodically.

Warning flags will be raised if someone over, say, thirty years of age has no credit record at all.  One example is someone closing all their credit cards and then using the secondary card of a spouse for all purchases.  This may make life easier, but the credit history will only be displayed on the spouse’s record.

On a personal note, my husband’s credit score was always higher than mine even though I take care of the family finances and pay the bills, and I’m clearly a better credit risk than he is.  I was determined to find out why.

It turns out that when we applied for our first credit card, he became the primary cardholder and the secondary card had the same account number and his name on it also.

I subsequently received a card in my name with a different number, but this made his credit history longer than mine.  I imagine it should have evened up by now.  Perhaps, out of curiosity, when I get copies of our credit report next time I’ll pay the extra money to get the credit score as well.

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  1. Eric Putnam on February 3, 2011 at 8:22 am

    Good comments on the issue of credit scores. There is a LOT of misinformation on the net and too many Canadians read US posts that are irrelevant. I personally get my wife’s bureau and my repports WITH score very 2nd year from Equifax as they have largest percentage of data provided by lenders and get my free reports each year from both bureaus

    An interesting series was written by Ellen Roseman of Toronto Star on credit bureaus and scores.. .. you may also like to know we have built a program partnered with a cdic-insured institution specifically to help folks who have had past credit challenges like paid off bad debts, credit counseling or insolvency improve their score and build savings towards their future goals Keep up the great posts 🙂 Eric

    • Boomer on February 3, 2011 at 3:06 pm

      @Eric Putnam: Six years is a long time to wait to get back on track after mishandling credit (mostly because of not knowing any better). I’m glad to hear of programs that assist with debt counselling, etc. Good job!

  2. Sustainable PF on February 3, 2011 at 8:48 am

    I have built a great rapport with my personal banker who handles our mortgage. I’ve found that with a little charm she will tell me what my credit score is.

  3. The Passive Income Earner on February 3, 2011 at 11:49 am

    Actually making use of credit is a good thing as it builds your credit score. My parents, now retired, was trying to get a new credit card to leverage a different benefits and he was denied !?! It’s not because of bad credit, but because there was not credits. He had been officially retired and had no need to borrow money anymore and it would appear that a long standing credit card did not do much either.

    • Boomer on February 3, 2011 at 3:15 pm

      @Passive Income Earner: It is my understanding that credit cards have to be used periodically (ie not show as “inactive”) to be scored. As you’ve mentioned, even if you don’t think you’ll ever need to borrow again, there can still be some instances where you might want to apply. If your parents really want this credit card they can ask if they are able to secure the card with their savings. Not everyone offers this option, but it’s worth asking about.

  4. Bill on February 6, 2011 at 2:15 pm

    Like “sustainable” I ask my banker periodically to check my score. If they ask me to consent to a credit check then I ask for the score in return – fairs fair. I had to open two new accounts recently as I am re-organizing my financial life. In December my score was 776 and by the end of January I was up to 802. I have no idea why, really. Even though I have the longer credit history my wife’s score is much higher – 822. I get both reports annually (off set 6 months each) as a check for suspicious activity.

    • Boomer on February 8, 2011 at 5:46 pm

      Hi Bill. Looks like you will never have any problems getting credit. In my former banking life you would have been an ideal lending client. There is a complicated formula for calculating credit scores that is incomprehensible to us normal folks so the reason for differences like yours and your wife’s, and mine and my husband’s are impossible to determine.

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