Your credit decisions, triumphs and mishaps are all summarized into a single number: your credit score. Think of it as an adult financial report card. Here’s what’s packed into that score.
Your credit report contains personal information regarding your financial history, such as your employment income, living expenses and how you pay your bills. It could also include prior arrests, car repossessions and if you ever filed for bankruptcy. Credit bureaus sell your credit report to other businesses who are evaluating your credit when you apply for a job, a loan or insurance. Making sure your credit report is correct could make a difference in getting your loan. By law, once a year credit bureaus must check your credit report.
Here are some warning signs that your credit report needs improvement:
Identity Theft– While you are looking over your credit report you notice some purchases that you never made from an account that you don’t have…you could be a victim of identity theft. If you have unidentifiable charges on your credit report that you never authorized then contact your creditor immediately.
Your Credit Cards have Reached Their Limits – Maxed-out credit cards can bring down your credit score if not paid off in a short amount of time. When using your credit cards, make sure you are within your financial means to avoid high balances. Plus, you will save money on the interest by keeping your credit card balance below 35% of your credit limit.
Pay Your Bills On Time – Making late payments on your bills costs you more money in fees while damaging your credit report. If you are having trouble paying your bills on time, contact your creditor to inform them of your problem. Get to the root of the problem so you can improve your money-managing skills.
By understanding your credit report, your will have a good credit score and it will help you to stay in control of your finances. Keeping track of your credit report will help save you money while preventing future credit problems.