[ The Real McCoy Online Home ]                                                                                                                    February 8, 2008

Credit reports can help consumers 
get finances in order

By Rob Schuette, The Real McCoy Staff

      Everyone in the Fort McCoy community should review their credit reports annually and know their FICO scores, said Bryan Clarkin.

Photo: Bryan Clarkin instructs a class about how to properly check credit scores at Army Community Service. Credit scores can be used to help determine loans and hiring and promotions. (Photo by Rob Schuette)
Bryan Clarkin instructs a class about how to properly check credit scores at Army Community Service. Credit scores can be used to help determine loans and hiring and promotions. (Photo by Rob Schuette)

      Clarkin, the Fort McCoy Army Community Service (ACS) Financial Readiness Program manager, said it's important personnel know their credit scores because they are used to help determine a number of things, including credit approval for loans (personal, mortgage), interest rate levels, insurance rates, and whether or not you are hired for your next job or receive a promotion. 

      "With that much on the line, it is surprising that only 22 percent of people check their credit scores the recommended once a year," Clarkin said. "(Astonishingly), 42 percent of consumers 18 and older have never even checked their credit scores."

      The lack of oversight can lead to credit problems. Clarkin said one survey indicated that 25 percent of the credit reports surveyed had serious errors. Altogether, 79 percent of credit reports surveyed had serious or other mistakes on them.

      Most consumers also don't know the difference between good and bad scores and how to improve them, he said.

"Beware of the companies that promise they can fix your credit score or credit. They can range from giving you illegal advice to a short-term fix..."

Bryan Clarkin,
Fort McCoy Financial Readiness Program Manager

      A BrightScore class offered through ACS Jan. 30 provided members of the Fort McCoy community with information about their credit reports. The BrightScore credit check was free for active-duty military personnel and cost $19.95 for federal civilian and military personnel. More information about this and other credit report reviews can be obtained by contacting the Fort McCoy Financial Readiness Program.

      The Fort McCoy Financial Readiness Program also offers information about credit reports and FICO scores, Clarkin said. FICO stands for the Fair, Isaac and Company (model credit scoring).

      The higher the score, the less risk personnel represent to a prospective lender. Clarkin said FICO scores range from 300-850 points and are used to determine if personnel are qualified for a loan or credit offer and what interest rate they will pay.

      Personnel with FICO scores less than 620, for example, are considered to have very risky credit. They probably will have a hard time qualifying for a loan, and if they do, the interest rate will be very high, probably toward the maximum rate allowed. A FICO score above 660 is considered acceptable, while the very good range starts at 720 and the excellent range is 750 and above. Each level improves the chances a loan will be approved. And as the score goes higher, consumers will get a more favorable interest rate, as well, Clarkin said. Any consumers seeking preferred interest rates need to have a FICO score of 720 or higher.

Credit scores available free to consumers

      Personnel can request a free copy of their credit reports from the major U.S. credit reporting agencies, which are Experian, Equifax and TransUnion, by going to the Web site http://www.annualcreditreport.com or by calling toll-free (877) 322-8228.

      If consumers contact the credit bureaus directly, they will be charged for the services.         

     The direct contact information for the credit-reporting agencies is:

       For more information about the use of credit in the Fort McCoy community, call Army Community Service at (608) 388-3505 or visit 2111 South 8th Ave.

      Five factors are considered in determining a FICO score. The most important is the repayment history, which comprises 35 percent of the score. The next most important factor is the amount owed at 30 percent. The other 45 percent of the score is comprised of the length of the credit history (15 percent), and new credit and types of credit used (both 10 percent).

      "Beware of the companies that promise they can fix your credit score or credit," Clarkin said. "They can range from giving you illegal advice to a short-term fix, after which consumers can find themselves in the same situation they were before the 'fix.'"

      Personnel who want to build sound credit can take direct action to improve their credit scores. The first is to pay all bills on time. This includes such things as house and car payments, utilities, such as electric, heat and water, cable/satellite television, credit cards, medical bills, etc.

      A study by the Experian Credit Agency revealed that 55 percent of consumers had at least one delinquent payment on their credit report, and 34 percent of consumers had a delinquency report within the past year. Consumers with one delinquency score averaged a FICO score of 598 verses 759 for those with no delinquent payments.

      Personnel should monitor and restrict the number of credit cards they have.

      More credit cards does not necessarily mean better. If consumers plan to open more credit cards, it is better to do it over a period of time, rather than all at once, Clarkin said.

      Credit card balances should be kept low. Debt should be paid off rather than moving it around to new cards, such as those that have a low introductory interest rate or perhaps a 0 percent rate, he said.

      Consumers should read and understand the basic terms of credit card use.

      Clarkin said this includes the proper way to dispute account or billing entries -- not just deciding not to pay an amount, which can harm credit.

      "Consumers need to realize they can improve their credit report over time; there is no instant fix," he said.

      A number of resources exist that can provide assistance. In addition to ACS, personnel can contact their command financial specialist, legal services, and Defense Credit Unions. The military Web site http://www.militaryonesource.com and the Consumer Credit Counseling Services, with a toll-free national locator number of (800) 388-2227, can provide good information, he said.

      Personnel also can stay on top of their credit by following a budget, understanding their credit reports and obtaining them annually, maintaining a high FICO score, continually managing debt and expenses and opting out of all pre-approved credit offers by calling (888) 5-OPTOUT (1-888-567-8688.)

      For more information about credit or financial matters in the Fort McCoy community, visit the Web site http://www.mccoymwr.com and click on Army Community Service, Financial Readiness Program or ACS Schoolhouse, Financial Management or call (608) 388-3505.


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