For 2012, Consumers' Total Credit Scores Should Be at Least 2,012
Consumers Should Aim for at least an Average 670 Score from the 3 Credit Bureaus: TransUnion, Experian, and Equifax
Norwalk, Conn. — December 27, 2011 — According to Carrie Coghill, Director of Consumer Education for FreeScore.com, a consumer's 2012 New Year's goal should be to have his or her credit scores add up to at least 2,012.
Coghill stated, "You have three credit scores from the three major bureaus: TransUnion, Experian, and Equifax. If those scores total 2,012, you'll have an average score of about 670, which is a solid 'B' and acceptable for getting loans."
According to FreeScore.com, "Directional letter grades associated with credit scores are as follows:"
|A||741 — 850|
|B||641 — 740|
|C||541 — 640|
|D||451 — 540|
|F||300 — 450|
*These are guideline-only grade ranges for scores. These grade ranges are simply directional and cannot be used as a "rule." They are designed to help consumers better understand credit scores by translating them into rough "grade ranges."
For consumers, Coghill recommends the following dos and don'ts:
- DO pay all bills on time, every time.
- DO keep all financial documents. That includes bills, bank and credit card statements, receipts, canceled checks, and so on for the last several years. This documentation will help a person dispute errors on a credit report, including unauthorized charges. If a consumer ever has to deal with identity theft, this information will help as well.
- DO get credit reports. Consumers need to review their credit report from each of the major credit bureaus, TransUnion, Experian, and Equifax.
- DO clean up errors on a credit report. Once a consumer has their credit reports, disputing negative items is the fastest, easiest way to remove them and thereby make certain that their credit scores reflect an accurate financial history.
- DO reduce the level of debt. Focus on paying off credit cards, both because they have high interest rates and because they affect a credit score a lot.
- DO minimize the number of inquiries on a credit report. Single inquiries (as from new credit applications you make) won't have a big impact, but a number of inquiries in a short time period is generally not good.
- DO keep open but unused credit card accounts, especially older ones. The longer the average account age and credit history, the better, so keeping old but unused accounts open can help because it shows a consumer to have a long credit history. Unused credit also improves a consumer's ratio of used to available credit.
- DON'T apply for or take on new revolving credit unless it is really necessary. If a consumer is already maxing out his or her available credit, new applications and additional debt may hurt a person's finances. For example, FreeScore.com consumers ran "what-if" credit simulations and found that increasing credit on a credit card can drop a credit score by more than 50 points.
- DON'T go bankrupt if there is any possible way to avoid it. Bankruptcy can take years to overcome.
About FreeScore LLC
FreeScore.com is the leading online consumer credit service, providing members with affordable, unlimited access to all three credit scores and their complete credit profile. For more information, go to FreeScore.com. FreeScore.com is a service of FYI Direct, Inc.