Why Your Credit Score is so Important

Your Credit Score is like your reputation, it follows you everywhere. Protect it as best as you can.

What Makes Up a Credit Score

A credit score takes into account a lot of different information from your credit report, but it’s not all treated equally. Some aspects of your credit history are more important than others and will weigh more heavily on your overall score. Your FICO score is essentially made up of the following:
· Payment History – 35%
· Total Amounts Owed – 30%
· Length of Credit History – 15%
· New Credit – 10%
· Type of Credit in Use – 10%
As you can see, the bulk of your credit score comes from your payment history and how much debt you actually have. Those two items account for 65% of your score. So, if you’re really looking to improve your credit score, these are the areas you’ll want to tackle first.

Why Your FICO Credit Score is Important

We’ve determined what makes up a credit score, but why is it so important? Your credit score will follow you for your entire life and if you are ever trying to borrow money, the lender is going to look at your credit score to determine whether or not to lend money to you. Need to buy a car? They will check your credit score. Looking for a mortgage? You can bet they are checking your credit score. In fact, even some employers are checking credit scores when hiring to possibly determine who would make a good employee.
Not only does your credit score determine whether or not you’ll receive financing, it also determines how much it will cost you to borrow that money. People with higher credit scores are deemed to be less of a risk and therefore will typically receive the lowest interest rates. Those with lower scores are viewed as more of a risk so the bank will offset that risk by lending you money at a higher interest rate. And when you’re talking about larger loans such as buying a vehicle or a home, just an extra interest rate point could add up to thousands, and even tens of thousands of dollars wasted on interest.

2010 Five Star Wealth Managers

A big thanks to San Diego Magazine and San Diego for honoring me and our practice this month. I am humbled and grateful for the honor of being one of San Diego Magazine's 2010 Five Star Wealth Managers.

From February's San Diego Magazine, the award, "represents less than 4 percent of the wealth managers in the San Diego area. Only 456 of the top-scoring wealth managers made this year's list."

Cheryl, Marcie, and myself work hard to provide the best customer service and financial planning to all our clients. I am excited to share this honor with them and all our clients whom we serve.