Overall, Ohio credit scores are better than they’ve been in a long time. Nationwide, the average credit score is about 700. This is ten points higher than it was in 2006 (before the Recession). In the Buckeye state, jobs are opening up, and more consumers are paying their bills on time. In July of 2017, Ohio residents may have noticed slight increases in their ratings. This is because a large amount of tax liens and civil judgments were stricken from credit reports at this time.
For Ohioans who typically don’t bother to check their credit scores, now is a good time to start keeping track of this very important number. Not only is it advantageous to know your credit score, but it’s also helpful to understand how it is calculated. Armed with this information, Ohio consumers can pinpoint their credit weaknesses and strengths in order to build the best credit score possible.
Why aren’t more Ohio Residents Regularly Checking Their Credit Scores?
Ohioans have better access to their credit scores than ever before. In the old days, checking your credit score always meant paying a fee. Now, however, free credit scores are fairly abundant. You can get a complimentary VantageScore by signing up with an online service like Credit Karma or WalletHub. Free FICO scores are harder to come by. But some banks and credit card companies offer them to their customers as a perk.
With all of this access to free credit scores, there’s no excuse to not know where you stand with your credit. Yet, there are still a lot of Ohio consumers who are in the dark. According to a national survey, about 44% of consumers have not checked their credit scores in the past year. Of course, older Americans are doing much better with credit score checks. The poll revealed that 85% of Baby Boomers know their credit standing. However, only 57% of Millennials can tell you their credit scores.
How Credit Scores Play a Major Role in the Lives of Ohioans
Maybe if more Ohioans realized how much of a role their credit scores play in their lives, they would be more likely to check them. For example, lenders and credit card issuers base approval decisions on risk, and high credit scores indicate lower risk. Therefore, people with higher credit scores are more likely to be approved for loans and new credit. Typically, the will also receive better interest rates. Cell phone companies and landlords also use credit scores to determine whether or not they need to charge security deposits and how much they should be. This means that cell phone users and renters with low credit scores may have to pay more for phone service and rent.
Your credit score may also determine how much you pay for auto insurance and whether or not you’ll get certain jobs. Sadly, Ohio consumers with low credit scores may find that they are paying more than they should for nearly everything, and missing out on opportunities. This is why it’s important to keep tabs on your credit score and work to improve your rating if it’s low.
What Factors make Up Your Credit Score?
There are dozens of different credit scoring models. However, most lenders and creditors use the FICO score when making an approval decision. There are also different versions of the FICO score available, but here is a breakdown of the most basic FICO model:
35% = Payment History
This is the most heavily weighted part of your FICO score – how well you’ve managed your loan and credit card obligations.
30% = Amounts Owed
This refers to how much you currently owe lenders and creditors.
15% = Length of Credit History
How long have you been using credit? A longer history of positive payment activity is scored better than a shorter one.
10% = New Credit
Recently opened accounts count can help your credit score because they increase your amount of available credit.
10% = Credit Mix
Credit card accounts are a type of “revolving credit,” while home, auto, and personal loans are referred to as “installment credit” lines. You’ll need both types of credit on your credit reports to earn the best possible credit score.
Ohio residents with poor or fair credit scores will probably want to work on the “payment history” and “amounts owed” categories first. This means that they should make sure that they’re current with their bills and that they aren’t carrying high credit card balances. On the other hand, Ohioans with good credit who want excellent credit should zero in on new credit potential and their credit mix.
Why Credit Reports are just as Important as Credit Scores
Ohioans should know that all of the information used to calculate their credit scores comes from their credit reports. This is why you should monitor your credit reports. About 80% of consumer credit reports contain inaccuracies of some kind, and a lot of these mistakes are big enough to harm credit scores.
Every 12 months, Ohio consumers are entitled to request free credit reports from each of the major credit bureaus. Credit reports from TransUnion, Experian, and Equifax can all be acquired through www.annualcreditreport.com. While going over your credit reports, if you spot any errors, you can dispute them. You can then have them removed, and possibly increase your credit score.
The process for disputing credit report errors can be confusing, but Ohio residents can get a FREE credit repair lawyer to help. All you have to do is call the Law Offices of Gary D. Nitzkin, P.C. An experienced attorney will clean up your credit reports and you’ll pay NOTHING for our services.
The Free and Legal way to Get Better Credit
Don’t let errors on your credit reports bring your credit score down. At the Law Offices of Gary D. Nitzkin, P.C., we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? The law allows us to collect our fees and costs from the defendants in any successful action. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (216)358-0591 or sending him a message through our contact page.