By understanding your credit and how it’s scored, you can empower yourself to improve it.
Your credit history and score impact your financial future, whether it involves paying for college, buying a car, or signing a lease on your first apartment. The health of your credit history and score will determine if you can get credit and how much you pay for it. And like it or not, some employers look at credit scores when hiring new employees. That’s why keeping your credit history clean and error-free, and your credit score healthy, are vital steps in your financial path.
Get a free credit report
The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer credit reporting agencies to provide you a free copy of your credit report once a year.
Understand your credit score
Your credit score is calculated from five different categories on your credit report. Learn about these categories and how much impact they have.
Learn how to read your credit report
Learn what to look out for, and what critical information you should review for accuracy.
Credit Cards and Your Credit Score
As you might expect, credit cards tend to play a big part in our credit scores. Credit cards can be a very important financial tool for many, and their responsible use will reflect positively on your credit report. But managing a credit card can be challenging, and making mistakes can have a negative impact on your credit score.
Watch out for the warning signs that you may be overextending yourself with credit card use:
- You find that you’re only able to make the minimum payments on your cards.
- Your cards are over or near their credit limits.
- Your monthly balances are increasing instead of being paid off.
If any of these look familiar, then you would be wise to revisit your usage and stop using your cards until you have paid them off.
Improving your credit score
Your credit score is a number that represents the likelihood that money you borrow will paid back as agreed. To maintain a good credit score, you need to show that you can be responsible with someone else’s money.
There is no quick fix for a low credit score, but if you follow some basic steps and pay your debts back consistently and on-time for the long haul, you will be on the way to improving your credit.