I NEED MORE MONEY THAN I HAVE… HOW DO I SOLVE THIS…? SIMPLE…. GO TAKE OUT A LOAN …. EASY, RIGHT? NOT EXACTLY. LONG BEFORE CREDIT SCORES, HUMAN JUDGEMENT WAS THE KEY TO DECIDING THE RISK OR QUALITY OF A POTENTIAL BORROWER. NOT ONLY WAS THIS A PAINSTAKING PROCESS BUT IT WAS ALSO UNRELIABLE. EVENTUALLY, A POINT SYSTEM WAS DEVELOPED THAT ELIMINATED MOST OF THE HUMAN BIAS THAT PREVIOUSLY EXISTED. SO… WHAT IS A CREDIT SCORE AND HOW DO I KNOW IF MINE IS GOOD OR NOT? A CREDIT SCORE IS BASICALLY A SYSTEM THROUGH FICO THAT EVERYBODY WHO IS A WAGE EARNER PRETTY MUCH HAS. WHETHER IT IS IN THE MILITARY OR CIVILIAN. SO IT IS SOMETHING THAT IS GOING TO BE WITH YOU THE REST OF YOUR LIFE. A GOOD CREDIT SCORE DEPENDS ON THE SCORING SYSTEM USED BY YOUR PARTICULAR LENDER. DIFFERENT SCORING SYSTEMS USE DIFFERENT SCALES, AND DIFFERENT LENDERS USE DIFFERENT SYSTEMS. MOST CREDIT SCORES RANK INDIVIDUALS ON A SCALE FROM AROUND 350 TO 850. THE HIGHER THE SCORE, THE LESS YOU ARE SEEN AS A FINANCIAL RISK TO CREDITORS. MY FICO IS THE COLLECTOR THAT CAME UP WITH THIS KIND OF PATENTED SYSTEM AS FAR AS DETERMINING A SCORE.

AND, EACH CREDIT REPORTING AGENCY MAINTAINS ITS OWN ALGORITHM IN SAYING THE PROBABILITY OF YOU BEING PAID BACK. SO, EQUIFAX, TRANSUNION AND EXPERIAN ARE THOSE THAT DO THE CREDIT REPORTS AND CREDIT SCORES. A SCORE OF 680 OR HIGHER WOULD GENERALLY BE CONSIDERED GOOD, WITH THE NATIONAL AVERAGE BEING AROUND 692. A LOWER SCORE CAN BE CAUSED BY A LOT OF DIFFERENT REASONS. PAST BEHAVIOR, FOR EXAMPLE, COULD MEAN YOUR PAYMENT TRACK RECORD HASN’T ALWAYS BEEN PERFECT.

ALSO… ALWAYS PAYING IN CASH AND NOT HAVING ESTABLISHED CREDIT CAN EVEN HAVE AN IMPACT, BELIEVE IT OR NOT. LET’S JUST SAY A PERSON JUST HASN’T HAD ENOUGH TIME TO DEVELOP A CREDIT HISTORY. THAT MAKES IT HARD TO EVALUATE YOU. IT IS EXTREMELY IMPORTANT TO START ONE’S CREDIT HISTORY ON THE RIGHT FOOT BECAUSE IT CAN AFFECT YOUR FINANCES. FOR EXAMPLE, SAILOR A AND SAILOR B TAKE OUT A TWENTY THOUSAND DOLLAR CAR LOAN AND PAY IT BACK OVER FIVE YEARS. SAILOR A HAS A 600 CREDIT SCORE AND SAILOR B HAS 720. SAILOR A WILL END UP PAYING ONE HUNDRED AND THIRTY FIVE DOLLARS A MONTH MORE THAN SAILOR B…. THAT’S OVER SIXTEEN HUNDRED DOLLARS A YEAR DIFFERENCE IN THEIR PAYMENTS. A NOT SO GOOD CREDIT SCORE CAN ALSO AFFECT MILITARY MEMBERS PROFESSIONALLY… NOT JUST FINANCIALLY. THOSE PEOPLE THAT MIGHT LOSE CHOICE ASSIGNMENTS BECAUSE THEY DON’T MAINTAIN A CERTAIN CREDIT SCORE WOULD BE AFFECTED.

IT ALSO AFFECTS YOUR SECURITY CLEARANCE VERY MUCH SO. 61% OF SECURITY CLEARANCES THAT ARE PULLED ARE DUE TO FINANCIAL REASONS. THAT IS THE MOST WIDELY USED CATEGORY AS FAR AS FINANCES. SAILORS SEEKING CREDIT SCORE INFORMATION… OR SIMPLY WANT GET SOME FINANCIAL ADVICE SHOULD STOP BY A FLEET AND FAMILY SUPPORT CENTER AND ASK TO TALK TO ONE OF THEIR FINANCIAL ADVISERS . IF YOUR CREDIT SCORE ISN’T WHERE YOU WANT IT TO BE, THERE MAY BE SOME THINGS YOU CAN DO TO HELP IT ALONG. THE BEST THING TO DO IS TO COME IN AND BE AHEAD OF THE CURVE. DO SOME PLANNING… BECAUSE THESE ARE SKILLS YOU ARE GOING TO NEED FOR THE REST OF YOUR LIFE, WHETHER YOU ARE IN THE NAVY OR NOT. FLEET AND FAMILY IS ALWAYS THERE TO HELP… COME AND SEE US. BE VIGILANT… MAKE SURE TO CHECK YOUR CREDIT AT LEAST ONCE A YEAR… IT’S FREE… EVEN IF YOU HAVE GOOD CREDIT… YOU NEVER KNOW WHEN SOMEONE ELSE CAN TAKE IT FROM YOU!

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