Everyone has heard of a credit report. But many people don’t know exactly where to get it, or what to do with it when they have it.
What is a credit report?
It’s basically a track record of your past financial performance.
What does it track?
It looks at when you have paid your bills, the amount of credit you currently have on your cards, how much debt you owe, and so on. In other words, it is a snapshot of the past seven years or so of your financial habits with respect to credit and debt in your life.
Your past record is an indication of future performance. It can helps help any would-be creditor determine whether or not to give you a loan, mortgage, or credit card. It also determines what the interest rate will be. Even college loans are awarded based on your credit history. In other words, if you don’t have a good financial record, this could affect your entire financial future, and that of your children.
What counts as a good credit score?
Generally, a credit score of at least 700 these days is considered to be a good one that will help make it easier for you to borrow and will also offer you the chance for the best interest rates.
Who tracks it?
The three major bureaus are Experian, Equifax, and TransUnion. You can get a free copy of each report once a year. They will not all be identical, but they will be similar. You can also get one every 4 months to keep tabs on your reports and make sure there is nothing incorrect on the reports.
The most important thing is to check once you get your report is that there are no errors. If there are, you need to get the report fixed quickly so that it does not damage your credit rating.
It also helps prevent identity theft.
Since you can track all your financial history, it will be easy to see if there are charges you don’t recognize. The bottom line: make sure you look carefully on each report to verify that everything is correct. This could easily be the difference between getting that loan or not, or getting a good interest rate or a bad one. Therefore, it pays to do your best to try to establish a better credit score for yourself, for a better financia future, not caught in the credit crunch.
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