To Get Good Rates Know Your Credit Score

NEW YORK(5/21/02)--Half of all consumers have high credit scores that will earn them the best interest rates. But how good does your score have to be to get the best rates?

The highest possible score is 850. Anything higher than the mid 700s is fine and will get you the best rates, according to Craig Watts, consumer affairs manager for Fair, Isaac & Co., the company that compiles the FICO scores that most lenders use. A median score is usually in the 720-725 range (Kiplinger June).

Consumers with scores lower than 700 have the most to gain by improving their numbers. Keep in mind that improving your score can take years. The quickest fixes are catching errors on your credit report. If you report an error to the credit bureau and lender, you should be able to raise your score with little delay.

If you've had problems--such as an outstanding balance that's too high--if you pay it down, you could see improvement over six months to a year. Fixing bigger problems, such as paying credit card bills 30 days late, takes more time.

Be leery of Web sites that offer free credit scores, such as Consumerinfo.com. This site only will give you your score if you agree to a 30-day trial of its credit-monitoring services. If you don't opt out in time, you'll be charged $79.95 for a year's worth of services.

You can order your "Score Power" report for $12.95 at Fair Isaac's Web site . The report includes your FICO score, an explanation of the codes that describe your weaknesses, and suggestions on how to improve the numbers. You'll also get a copy of your credit report from the Equifax credit bureau.