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Utah Saves Challenge: Check your credit

By KSL.com | Posted - Feb. 22, 2011 at 5:00 a.m.



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SALT LAKE CITY -- All week, the Utah Legislature and Gov. Gary Herbert are promoting financial responsibility among Utahns. Each day, Utahns will be asked to perform a challenge that will help them be more financially sound.

Tuesday's Challenge:

Order your credit report and FICO score at annualcreditreport.com. Report the completion of the challenge at imagineahappieryou.com and you will be entered to win special prized including savings bonds, UESP scholarships, and gift cards.

As part of the credit score challenge, 250 participants will have the opportunity to improve their FICO credit scores over the next 60 days. The challenge is open to everyone and is designed to see who can raise their FICO scores the greatest number of points by May 1, 2011. For more information on the requirements, click here.

Credit score expert Al Bingham told KSL Tuesday morning that there are significant changes in credit score reporting, especially for those trying to buy a home.

"A lot of people are finding when they go buy a house the credit score requirements are much higher now than they were two or three years ago. It makes it much more challenging to qualify for a home mortgage," he said.

"You're paying more money. It's costing you more in higher interest rates, higher charges in order to secure that mortgage. So people need to be more aware when they go to buy a house," he continued.

He said there are three ways to establish good credit.

  1. Locate a respectable lender
  2. Establish a line of credit
  3. Use it sparingly

Does checking your credit actually hurt your credit score?

"Not if you check it on your own," Bingham said. "If you have a lender or someone else check it, yes. They call those hard inquiries. They will impact your credit score. It's only when you go apply for credit does it impact your credit score."

Some companies offer to let you see your credit score. "Be careful, because those are not the actual credit scores used by your lenders, insurance companies and other financial institutions. The one you want to get your credit scores from is myfico.com," Bingham said.

How often to check credit

"People with a 760 credit score or above probably should check your true credit score once a year. If you're below 720, 700, maybe two, three or four times a year. You want to see the progress," Bingham said.

How long will bankruptcy affect your credit?

"Chapter 7 bankruptcy goes 10 years from the filing date. Chapter 13 bankruptcy seven years from the filing date. So it depends on the type of bankruptcy," Bingham answered.

He says 760 is a good credit score. "It's the new environment. You really need to push that credit score higher," he said.

For a person just establishing credit, that may take four to six years. For a person reestablishing credit, it could take longer depending on what's in their credit report.

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