I'm sure everyone has seen the TV advertisements for access to free credit scores, but why is your credit score what it is?

I see many potential borrowers SHOCKED when they see their credit scores. There are the factors that everyone talks about like revolving account balances, late payments, collections, and length of time accounts are established. There are a few factors to keep in mind about TRUE credit scores.

1) The credit score you pull for a car loan and mortgage are different.

Many car dealerships and lenders pull only one credit score when checking credit for a car loan. What people don't realize is that these companies pull a different range for the credit scores then the standard 350-850 scores that are used for mortgage credit pulls. I have had my own credit pulled by a dealer and my score was 30-35 points higher then if I pulled credit through my own company. This is because of the fact that some places only pull one score ( the one they pull may be your highest) and they may go off of a different rating.

2) Depending on when you pull your score, it may increase or decrease.

I'm one of those people that pay for EVERYTHING on a monthly basis on my credit card. I then proceed to pay it off when due. If you are like me, if your credit is pulled when your accounts show a lower balance, your score may be significantly higher.

3) How can I improve my score

Many Loan Officers are not blessed with having a credit rescoring system and will give you "ideas" to raise your credit. Make sure you ask about this and are not going out of your way to pay something off that IN THEORY will increase the score! With the credit rescoring program like I have, I have raised a borrowers score by 40 points in 3 days! Basically, what to take from this is people that think they cannot get a mortgage loan potentially can if your loan officer can do something like this!

4) Every single persons credit is calculated differently!

No two people have the EXACT same credit history, exact same credit card limits and balances, exact same amount of different mortgage and car loans and history etc. Make sure that when you pull your credit you can have someone go over it in detail and can tell you what effects every SINGLE thing with your score. Certain loan programs are very touchy with your credit score to qualify you for rate, so keep this in mind and make sure to ask if rescoring your credit for a better rate is an option or if you can rescore your credit to qualify for a car or mortgage loan!

5) Fighting accounts

There are a couple of different ways to dispute accounts on your credit. You can ask your loan officer for the name and number of the creditor and usually get them to write a letter for your loan officer to take something off credit, or have the company take it off credit themselves ( the loan officer option is usually faster because we have more control over the time frame).

Everyone's opinion on credit scores may vary from mine, but take it from someone who has rescored A LOT of customers, in SOME ( not all!) cases it may be easier then you think!

Here is the nationwide breakdown of credit scores in relation to percentage of people who have them:

350-549=7%

550-649=20%

650-699=15%

700-749=18%

750-799=27%

800-850=13%

* Data pulled from my banks provider of credit scores