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According to Consumer Credit Counseling, the average credit score in South Dakota is 710. That's the highest in the nation. But what is a credit score, and how important is it? Terry Mills with Consumer Credit Counseling in Rapid City says, "I always tell people: Other than your birth certificate, it's probably the three most important documents you'll ever use in your life." Mills is talking about your credit reports. Those reports include your credit score - a number that falls somewhere between 350 and 900. Mills says the three credit report bureaus, TransUnion, Equifax and Experion, calculate that score based on five categories. Mills says, "Thirty-five percent of the score is based on your payment history - have you paid your bills on time, every time? Thirty percent of the score is based on your debt to income - how much I owe versus how much I make. Fifteen percent of the score is based on how long you've had credit. Ten percent of the score is based on how much credit you've opened up in the last twelve months, and the last ten percent is a mathematical formula." That score is what lenders use to determine the interest rate for a loan you may be seeking on big item purchases. But they're not the only ones. Mills says even employers and landlords look at your credit score. So how do you find out your score? Mills says, "Annualcreditreport.com. It's a Trade Commission website and you can get, under the new law, you can get a copy from each of the three credit bureaus once a year, and it's important that you do that." And Mills says if you're not happy with your number, getting rid of your credit card isn't the answer. Instead, he says, stay on top of your bills. Mills says, "Paying your bills on time and reducing your debt is the fastest way to build your score and build your credit." Mills also says how well you keep track of your credit can affect your score. Mills says, "You can pull your credit bureau (report) as often as you like. It will not affect your score. However, if you let a potential lender, car dealership, credit card offer, those things, you can lose up to five points every time they pull that up. Plus, you're giving very sensitive information like social security numbers and people, to people we don't know." So credit is like playing a game of cards. Go in with more than you have, and you may end up losing it all. So get a good read before you play your hand.
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