Managing credit is a challenge that we all face. No matter what level of income you earn, handling credit is a necessary skill. Anyone who has ever been denied credit understands how the lack of credit affects financial options and everyday life. Your credit report and credit score can affect your ability to purchase a home, rent an apartment, buy or lease a vehicle, find good insurance rates, or even acquire a new job. The first step to stabilize your credit is reviewing your credit report.
What Is Your Credit Report?
Your credit report is a compilation of data about you that has been gathered by credit reporting agencies or “credit bureaus.” The credit reporting agencies sell this information to lenders and other companies and organizations with a legitimate business need to know how you manage credit. How you handle credit today will affect your access to credit later because lenders review your credit history when deciding whether to lend you money. The information included in your credit report includes:
- Identifying information – including Social Security number, address, and date of birth. This information is used to ensure that the credit report information is accurate and matched with the right person. It can also help detect and prevent identity fraud.
- Employment history – where you’ve worked and for how long.
- Credit history – account records with creditors.
- Inquiries – a list of who has requested your credit report.
- Public records – including collections accounts, bankruptcies, and late child support payments.
Most lenders use a mathematical formula to generate a ”score” to help them determine if you are a good credit risk. This is called a “credit score”, and the most frequently used version is the FICO® Score created by Fair Isaac and Company. A FICO® Score is a snapshot of your credit risk picture at a particular point in time. FICO® Scores range between 300 and 850 with higher values indicating a lower risk to lenders. To learn more about your credit score visit: www.myfico.com. Bottom line. Pay your bills on time, and in full each month. The result? A higher credit score which equates to paying lower interest rates and keeping more money in your wallet. The three major credit score models used in America are the FICO score, VantageScore, and CE Score. Contact our NFCC certified credit counselors to help you with your credit score reviews.
Credit Report Review Session – What to Expect
NFCC Certified Consumer Credit Counselors will provide you with a complete overview and understanding of what’s on your credit report, and will give you feedback and guidance on ways to improve your credit worthiness. After completing a credit report review session you will have a full understanding of how to interpret the information found on your credit report, what your FICO® Score is used for, and suggestions on how to use credit wisely to ensure your credit remains up-to-date. Not only is it vital to regularly check your credit report to ensure your financial standing, it’s equally important to check your report to protect yourself from fraud, inaccurate reporting, and identity theft.
Will Financial Counseling Hurt Your Credit Score?
Many people wonder if consulting with a financial counseling agency will affect their credit score. Your credit score is based on the information contained in your credit report. Simply obtaining counseling has no bearing on your credit score, as it is not reported to the credit bureau. Therefore, people should not have any hesitation about meeting with an NFCC Certified Consumer Credit Counselor to resolve their debt, housing, or other financial issues.
FICO® Score Facts: Does It Hurt Your FICO® Score If You Go To Credit Counseling?