COLUMBIA (WACH) -Having a good credit score is key if you want some of life's must haves; a car, home, or even a credit card.
One factor, they don't have the cash to shell out or the credit score needed to secure a loan.
So how do you know where you stand?
First, you'll need to grab your credit report.
If you want to see your actual credit score you'll have to pay a small fee, but without paying a fee you can still check out www.annualcreditreport.com.
Next, make sure its accurate
"There was a study recently that said one in five people have misinformation on their credit report so its a definite possibility," says Juliana Harris with the South Carolina Department of Consumer Affairs. "You know that's 20 percent of people that have credit reports could have misinformation."
If there's something wrong, Harris says "Its important to dispute those items. Alot of times its a clerical error. Its a mistake at the credit reporting agency. It could be indicative of identity theft though."
Harris adds that consumers should not apply for more credit while they're trying to rebuild.
"Hard inquiries are when we you know apply for a credit card alone," says Harris, "if you're doing that alot its indicative that you might have an unstable financial situation going on."
Ultimately your credit score is your ability to pay debts over the next 90 days.
Here's a break down of the five factors that determine your credit score and their impact according to the Certified Mortgage Planning Specialist Institute:
1. Your payment history-35% impact on your credit score. Pay debt on time and in full.
2. The balance you owe vs. your avaible credit lines-30% impact on your credit score. Keeping credit balances below 50% of your available limit is very important.
3. Your credit history, or how long your accounts have been opened-15% impact on your credit score. The longer your accounts have been opened the higher the score.
4. The type of credit you have open-10% impact on your credit score. A good mixture of auto loans, leases, credit cards and mortgages is best. Too many credit cards is not a good thing.
5. The number of recent inquiries that have been made by creditors- 10% impact on your credit score. Inquiries affect the score for one year from the time the inquiry is made.
Bill Oliver, a loan officer for Network Funding, recommends if you've maxed out credit cards try to pay them down, don't close them.
"If you have a $5,000.00 credit card and you owe $5,000.00 there are different trigger points, you want to get the balance down to 70 percent then 50 percent then 30 percent, " says Oliver. "You never want to close a credit card, the more available credit you have the better."
When it comes to credit cards Oliver says there are other ways boost your score.
"We ask them [financial customers] to increase their credit limits every six months, ask the credit card companies to increase the limits without charging any additional money,"says Oliver.
If your account has gone into collections, Oliver says "alot of people go ahead and try to pay off collections they think its going to boost their credit score. Don't. If you pay it off its still going to show paid. The collection is still going to be there so you still gonna see very little movement."
If you choose to seek professional credit repair services, the SC Department of Consumer Affairs has a list of licensed professionals to help you avoid being scammed.