Everyone who has or who has had any type of debt has a credit report and a credit score. It is important that you know exactly what these items are and how they affect your life on a daily basis. These are not something that should be ignored instead they should be taken care of. In this article you will learn about what a credit report is and how your credit score can affect your way of life.
What Is A Credit Report
A credit report is a report similar to a report card from school that basically gives you a grade on how well you manage your finances. There are three main credit-reporting agencies. These agencies are Transunion, Experian and Equifax. When looking at a credit report you will find that all of your creditors, both past and present, are listed on this report.
It will show your current balance, whether the account is opened or closed and if you are current on your payments. The other important item it shows is if you have ever had any slow pays, late payments of major delinquencies on any of the accounts. This is why it is always important to be responsible with your finances.
What Is A Credit Score
A credit score is the grade you are given by the credit report agencies. Because there are three different agencies it is possible that you will have three different scores although they will usually be around the same score. When a credit score is issued it will be between zero and 800. The higher the score the better your credit rating is. You want to have the highest possible score possible so you should be sure not to have any negative points on your report.
How Your Credit Score Affects You
Your credit score can affect you in ways that you did not even think about. Most people associate your credit score with obtaining a loan or a credit card. However your score can be more important than that. One example is that of a future employer. Employers are now doing credit checks on employees before hiring them. They want to see how well the person handles their own finances before letting them loose in their company. Responsibility is what it is all about.
Be Sure To Examine Your Credit Reports
On an annual basis you should obtain a copy of your credit report from each of the credit reporting bureaus. You are entitled to one free report from each agency per year. Once you receive your reports you will want to examine it for any mistakes. If mistakes are found you should contact the agency and have it corrected as soon as possible. Any mistake can have a negative impact on your credit score.
Conclusion
Your life is greatly affected by your credit report and credit score. It is important to take good care of these items and if there are mistakes get them fixed. You do not want to have any negative items as they will affect and loans and credit cards you wish to apply for as well as your employment status.
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