006: Money Basics: Credit Report & Scores
In last episode we talked about Credit and understood how it’s different from Debt. Today I’d like to discuss Credit Report and how our use of Credit and Debt gives us a report card that is important to maintain if you plan to borrow funds in the future.
What is a Credit Reports?
Your credit report is a summary of how you have managed credit and debt over the years. Credit reports track not only how much credit you have available to you but also how much of that credit you used — that is, how much you turned into debt. Credit reporting bureaus use the information from to assign consumers credit scores. Lenders use those scores to gauge whether credit applicants are an acceptable risk, meaning they should be able to handle more credit without getting too deep in debt. Too much debt can lower your score, but so can too much available credit just waiting to be used.
I think it’s time for you to pull your credit report, if you haven’t in the last 12 months. Sites such as www.creditcarma.com and www.fico.com will provide your report.