Now that a new year is approaching and we have heard so much about the credit crunch, it is time to take a look at your “financial fate” in the coming year. It is time to get savvy about your finances and your credit standing. I will make this tip into a series of tips.

Your credit score summarizes your credit risk at a particular point in time. It is more of an “average” than a grade. It is used as part of an overall assessment of your financial responsibility, one that greatly influences the amount of credit available to you and the conditions to which you may to agree in order to obtain that credit.

People often confuse credit report with credit score. A credit report is a history of your payment record and the number of credit sources you have (mortgages, loans, credit cards, etc). Based on your credit report, a credit score is created. Based on your history, the credit score helps lenders to predict how likely you are to pay on time.

 
This information is provided in an effort to help you gather and organize the information necessary to file your individual or small business income tax return. While these financial tools are not a substitute for financial advice from a qualified professional, they can be used as a starting point in your decision making process.