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Financial Literacy - Credit scores
Evan Hendricks
The author of "Credit Scores & Credit Reports" sounds off about the current credit reporting system.
Credit scoring, demystified

Interview: Evan Hendricks

Addressing problems with the current credit reporting system and ways in which consumers misunderstand it, privacy expert and author of "Credit Scores & Credit Reports: How the System Really Works, What You Can Do" Evan Hendricks explores the deep end of the credit-scoring pool.

At a glance

While busting several misunderstandings consumers might have about credit scores, he also offers his insight and advice about advanced credit scoring topics, such as mixed consumer credit files, when to seek the help of an attorney and how the credit card industry uses credit scores to make customers pay more.

Why check your score?
You say in your book, "Credit Scores and Credit Reports," that since there are five industry versions of the classic FICO score, consumers cannot rely on a score they bought online, even if it really is a FICO score. Why then should consumers bother to check their FICO scores before applying for a major loan?

You should check because you can still get a general idea of where your score stands by going online and getting your own score. Getting a general idea sometimes is important because if you're really high on the score line, then you'll be in good shape and if you're in the middle you know where you stand and then you know you can take certain actions if you were way down on the score line. It's still worth it to start with a general idea of what it is.

And certainly a point to understand is that when the rubber hits the road and you apply and the creditor pulls your credit report -- there could be some difference between the score you receive from what the creditor gets.

-- Posted: June 18, 2007
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