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Credit scores may seem like a straightforward term, but associated with it are many misconceptions. The many myths surrounding credit scores can confuse people. Thus it’s important to understand the basics. Credit scores are nothing more than a gauge of how credit worthy a person is. How this is determined may vary according to who’s assigning the credit score, but most include the basic component factors such as payment history, debt owed, credit history and types of credit. Credit scores can range between 300 and 850.

Let’s start out with the basics. Most people assume there’s just one credit score. The truth is there are at least six different ones. The most popular one that everyone’s heard of is probably the FICO score, published by the Fair Issac Corporation. Equifax uses what’s called BEACON. Transunion’s is called FICO Risk Score and Experian’s is called FICO II. These three should roughly be the same.

One misconception is that you should close credit cards to improve your score. This is a myth. Following this practice may actually hurt your credit score. The reason is because credit bureaus look at an individual’s credit history in determining a person’s credit score. If you have an old card, even if you don’t use it much, this card helps. It establishes that you’ve had experience with managing credit.

A person’s credit limit affects the person’s score. People assume that lowering credit limits will help the score. This is false. Credit bureaus looking a person’s debt utilization ratio. This ratio expresses debt as a percentage of a person’s total available credit. The lower your debt ratio, the more favorable your score will be. keep your debt utilization score between 10% to 20%.

Identity theft and fraud are serious matters. Besides the financial loss that is involved, an individual’s credit profile may be tarnished, creating difficulties for future borrowing. Thus it is a good idea to be aware of the various types of identity theft so that you can catch it and take appropriate action with the credit bureaus to correct/prevent it.

Most people associate identity theft with credit card fraud. This happens when someone else uses your credit card without your authorization. Your credit card number may have been stolen and used inappropriately. Always check your credit card monthly statements for irregular expenditures. Dispute anamolies. Credit card companies are usually good about this.

Another important and sensitive number to keep safe is your social security number. You’ve probably heard never to give this number out freely. Your social security number is associated with a lot of private information about yourself. You have it for your entire life. So don’t give it out, and if requested, as why it’s needed.

A person’s driver’s licence can be easily misused. It’s often lost or stolen when a wallet disappears. People may steal your driver’s licence to use if they have a bad driving record.

Medical identity theft is growing as more medical history is being documented. There may be many reasons why people would want to use your medical profile. It may be to get drugs or to access certain health care related services. Be aware and not let this little slip ruin your future medical benefits.

Criminal identity theft is a possible source of fraud too.

Two million loan applicants from Countrywide Financial may be exposed to possible ID theft. The mortgage company sent out a letter to its customers warning them that their personal and sensitive information such as Social Security numbers and credit files could be at risk.

This data breach resulted from a former employee who had been collecting and selling customer data to other financial institutions for marketing purposes. This lasted for a period of two years. The FBI has apprehended the suspect.

To assist Countrywide customers and loan applicants, the company has offered two years of free credit monitoring to those that feel their identity are at risk. As a matter of fact, Countrywide is encouraging everyone to establish a routine of review their credit profiles. It is indeed a good practice to start up. You can contact any of the three major credit reporting companies to sign up.

So what happens to your credit report/history and score when you get married? Worried that your new spouse’s bad credit profile will drag yours down? Well here are some quick facts that newlyweds should keep in mind going into their marriages.

It’s a common myth that credit reports and scores are combined when two people are married. This is untrue for the most part. Each individual retains their respective credit profiles as it follows the individual’s social security number. And since social security numbers don’t change, your credit history should have no impact. Your credit score should remain the same and will be a reflection of the credit accounts that you’ve held on your own in the past and moving on into the future.

The parts that will affect you will be those situations that you and your spouse decide to sign up for debt and financing together, jointly. This could include joint credit cards, loans, mortgages, etc. Anything that you do together, whether it be because of choice, or necessity (maybe you need both incomes combined to finance a debt), will then affect your credit. This is because when you file a joint account, you are agreeing to become responsible for that account and its payment. So even though you don’t use your joint credit card, your spouse’s activity on it could adversely affect you. Always be aware of what’s going on with your joint accounts. Your combined credit reports and scores could negatively affect your chances or your interest payments on a credit application.

It’s perfectly fine to have both personal credit accounts as well as joint accounts when you get married. You can keep building your personal credit profile by being financially responsible. This will help you down the road. Keep your personal credit accounts active while building your joint credit activities. And another thing, for the ladies out there… changing your name won’t erase your credit history. Though it’s often a tedious process, filling and submitting all the necessary paperwork, the change on your credit is simple. Report the name change to the credit bureaus and they’ll add your new name as an alias to your existing credit file.

On August 5, 2008 eleven people arrested and charged with what may be the largest identity theft case in U.S. History. The Department of Justice say that as many as 40 million credit card and debit card numbers were stolen by tapping into some of the country’s largest retailers computer and wireless network systems. The sophistication and the complexity of the operation was stunning. Stolen numbers were redistributed or used in various ways, some being attached to blank credit cards and others used as atm withdrawal cards. This identity theft case affects many customers who may have their information stored with retailers such as BJ’s Wholesale Club, OfficeMax, Boston Market, Barnes & Noble, Sports Authority, Forever 21 and DSW. Run a credit report to see if you’re in danger of credit fraud.