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The Importance of Your Credit Score

Understanding the value of your credit score is an important first step to improving your financial health.

Anyone who has ever applied for a loan to purchase a car or house has encountered their credit score. This elusive
figure can be perplexing, a three-digit assessment of your credit worthiness that has the potential to impact your
financial health. We offer insights into understanding your credit score and taking steps to improve it.

What’s In a Number?

Your credit score most commonly used by lenders is FICO, a three-digit number from 300 to 850. It fluctuates
continually, reflecting the interest rate of your credit cards, outstanding loans, and even a lack of credit.

Aim for at least a score of 700, a good figure by many lending standards. You can request a copy of your credit
report (there is a small fee) from the three major credit reporting companies, Experian, Equifax, and TransUnion.

Credit Worthiness

Check your credit report periodically, making sure that there are no errors, while using it as a tool to make sure
that you’re paying your bills on time and staying within your established credit limits. Such actions have the
potential to increase your credit score. You can request free copies of your Experian, Equifax, and TransUnion
credit reports from AnnualCreditReport.com.

If you spot any errors, report the discrepancies to the appropriate credit bureaus (the report may differ among the
three). They are required to take reasonable steps to correct any errors.

Establishing Credit

If you are a first-time credit seeker — applying for a credit card or loan, for instance — you may have to establish
your credit score, which you can do in several ways, including by getting a secured credit card or becoming an
authorized user of someone else’s card.

Improve Your Score

Not satisfied with your credit score and want to increase it? There are a number of steps you can take, like paying
your bills on time, decreasing the amount of debt you carry, and staying within your established credit limits.

By taking control of your credit score, you are taking prudent steps to improving your overall financial health.

Thanks for checking out the blog.

Joe Breslin, CFP®

This material is for general information only and is not intended to provide specific advice or recommendations for any 
individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive 
outcomes. Investing involves risks including possible loss of principal.
 
This material was prepared by LPL Financial. 
 
Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and 
broker-dealer (member FINRA/SIPC). 
Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice 
from a separately registered independent investment advisor that is not an LPL Financial affiliate, please note LPL 
Financial makes no representation with respect to such entity.

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The Importance of Your Credit Score