Free Credit Score Booklet

The three major national credit reporting companies (CRCs) are: Equifax, Experian and TransUnion. These firms collect information about your borrowing and repayment behavior from lenders and businesses that have extended credit to you. 

This information is compiled into a credit report. You can obtain a copy of your credit report from each of the three companies for a fee. 

You are also entitled to a free copy within 60 days of being denied credit from the CRC that supplied the lender with your report.

  • Pay your bills on time. Late payments can hurt your score significantly. If you have missed payments, get current and stay current. The more you pay your bills on time, the better your score.
  • Open a secured credit card ( 2 of them) for the both of you. 
  • Pay off  or settle any collections that has been placed in last 2 years that is non-medical. Since you are getting a lump sum payout you can negotiate a settlement with collection companies and old creditors for less than the full balance. ------->
  • Keep credit card balances low relative to credit limits (30 percent or lower is recommended). "Maxing out" your credit cards means you have a very high utilization rate, which significantly lowers your credit score.
  • Pay off debt rather than moving it around.
  • Open new credit accounts only as needed; new accounts decrease the average age of your total accounts. Having accounts that have been opened a long time increases your credit score.
  • Avoid closing credit card accounts because this also decreases the average age of your accounts.
  • Apply for installment loans (mortgages, car loans, etc.) within a 30-day period because most credit scoring models will count multiple inquiries within a short period of time as only one inquiry.
Your credit score is presented as a number that can fall within a range — usually from 350 to 850. However, some credit scoring products use different ranges — such as 501 to 990. If you obtain multiple credit scores and the same range was not used, you cannot directly compare the scores. For example, a credit score of 720 within the 350 to 850 range is not the same as a credit score of 720 using the 501 to 990 range.
Maintaining a high credit score is important because this is one of the factors that determine whether you will be approved for credit and the cost of your loan. Applicants with high credit scores typically are offered lower interest rates and better terms and conditions than applicants with lower scores. A low credit score reduces the chances that your loan application will be approved. And if it is approved, you will likely pay a higher interest rate for the loan than a borrower with a higher credit score.
If you apply for credit and are denied, you have the right to obtain a free copy of the credit report the creditor used when denying your application. You should obtain a copy of the credit report to make sure that it is accurate. If you find inaccuracies, you should file a dispute with that credit bureau. Here are the phone numbers and websites of the three major credit bureaus: