What do you know about credit? Having a working knowledge of credit scores and where you stand in the credit world can help you avoid issues in the future.
A credit score is a number
FACT Credit scores range from 300 to 850. Anything above a 700 is considered a good score. Your credit score is calculated by a number of credit reporting bureaus. The three major credit reporting companies are Experian, Equifax, and TransUnion.
Your credit score can affect your life
FACT Your credit score can determine whether or not you get a loan and what the interest rate on that loan will be. Your credit history can also affect your insurance premiums, your ability to rent or buy a home, and in some cases interfere with your employment.
You can get a free credit report
FACT I’m not talking about that website in those commercials with the humorous jingles. You’re actually entitled by the federal government and the Fair Credit Reporting Act (FCRA) to a free credit report once a year from each of the three major reporting companies. Equifax, Experian, and TransUnion will provide a free copy of your credit report once every 12 months through annualcreditreport.com. You can order your report from all three agencies at the same time or stagger them every four months to have a better understanding of your credit all year long.
Getting a credit check affects your score
FACT & FICTION When someone runs a credit check on you it can affect your score, but it is usually a minimal impact. Previous credit checks by insurers or creditors get added to your credit report and usually result in a small point deduction from your score. The good news is, when you get a credit check on yourself, it is not added to your credit report. You can pull your own credit report without worrying about the impact it will have on your score.
Bad credit is easier to fix than no credit
FICTION Establishing a credit history can be frustrating but it is not as difficult as trying to wipe out bad credit.
You might have no credit if you’ve never had a credit card or any utility bills in your name. Creditors might be reluctant to give you credit if you’ve never had any before, but this isn’t the end of the road for establishing your credit history. You can apply for credit through the credit union where you have an account and see what they offer to those without a credit history.
Bad credit doesn’t have to stay bad credit, but it does take time to remedy a bad score. You can start by making payments on time, not maxing out your credit cards, and paying down your debt.
Student loans are good for your credit score
FACT & FICTION Like any form of loan or credit, student loans are only good for your credit score if you make the payments on time. Student loans in your name can have a positive affect on your credit score if you pay them back on time. Otherwise, missing payments or paying late can negatively impact your score.
For more information about credit scores and reports, check out this website.
What myths have you heard about credit scores?