A Suze Orman exclusive

Your credit score is a lot like your cholesterol level. A good score means you are financially healthy; a bad score means you are seriously out of shape and at high risk for some serious problems.

Even though you may have no clue what your score is, plenty of businesses you come into contact with sure know your score. Your credit score plays a big role in stuff like:

• The interest rate you are offered on a mortgage
• The interest rate you are offered on a car loan
• Whether you can get a cell phone contract
• Whether a landlord will rent to you
• The premium on your car insurance
• Whether a prospective employer will hire you

Your credit score tells businesses what sort of credit risk you are. With a good score, everyone is going to be happy to do business with you and offer you good credit deals.

But a bad score is a big fat warning flag for them. Businesses might still be willing to deal with you, but they’re going to be nervous enough about your ability to pay your bills on time that they are going to charge you more. It’s their insurance policy in case you do indeed turn out to be a lousy credit risk.

I am not exaggerating when I tell you that your credit score is either going to save you tens of thousands of dollars or cost you tens of thousands of dollars. So how the heck can you not know what it is? More importantly, how crazy is it not to be doing everything possible to make sure your score is as high as possible? (Be sure to check out Five Ways to Improve Your Credit Score below for tips.)

FICO Is the Way to Go
There are a handful of companies that compute credit scores, but my advice is to stick with what is known as your “FICO” Score. This is the granddaddy of credit scores, computed by Fair Isaac & Co. One FICO score costs $14.95. (You actually have three different FICO scores, which I’ll explain in a minute.) To be honest, other businesses offer cheaper credit scores, but you can’t afford to go with cheap. Here’s the deal: businesses trust FICO and use its scores when checking up on your financial health. So if a mortgage lender or car financing company is going to be checking your FICO score, you better make sure you know exactly what your FICO score is. Just because your credit score from some other business looks fine, doesn’t necessarily mean your FICO score is in good shape. And trust me, when you are applying for a mortgage, or a job, you don’t want any nasty surprises.

Go to www.myfico.com to get your FICO credit score. As I mentioned above, you actually have three FICO scores, one from each of the three major credit bureaus. (More on them in a sec.) Unless you are going to be buying a home soon, I think it is perfectly fine to spend just the $14.95 to get one report. While there are indeed some differences among the three reports, they typically fall within a reasonable range. The one caveat is if you are buying a home. Quite often, a mortgage lender will take an average of your three scores, or could even just use your lowest score to determine the interest rate you will be offered. So for prospective home buyers it makes sense to fork over the money to see all three FICO scores. The $45 bucks for all three is a small cost when compared to the size of the mortgage you will be taking out.