Published on Mar 12, 2013
Everybody talks about credit scores and how important they are, but how much do you really know about credit?
For starters, credit is determined by looking at payment history, amounts of debt owed, length of credit history, new credit and types of credit used. There are many different ways to build and maintain credit, and tools you can utilize to make sure you keep a healthy credit score.
Why is credit important? Basically, credit determines whether you get a loan and how much interest you will pay on that loan. Here are some things to keep in mind when thinking about your credit score…
- A credit score is primarily used by lenders to assess the borrower’s risk of loan repayment.
- There are three major credit bureaus; Equifax, TransUnion and Experian.
- Under the Fair and Accurate Credit Transactions Act (the FACT Act), you can get a FREE credit report once a year from each of the three credit bureaus. Visit www.annualcreditreport.com to get started.
- freecreditreport.com is NOT a creditable website!
- Credit scores affect not only your qualifications for loans, but they can also affect your car insurance, and rental application.
- Maxing out credit cards hurts your credit score!
- About 80% of credit reports contain inaccurate information, so by checking regularly you have the opportunity to fix inaccuracies you may find.
- Pay your bills on time.