Credit scores say more about us than we think they do. They tell potential lenders about how much of a financial risk, or asset, you might be. Even some employers investigate credit history and use that as a way to decided whether to hire you or not.
So, What’s on the Report, Anyway?
For those who are still a tiny bit confused as to how to understand what their report says about them, here are a few tidbits of information that can help clear up any misunderstanding:
1) Apart from your name and date of birth, you’ll also see things like a list of your credit accounts, when they were opened, and so on. Mortgages—and paying on them every month—are on there, as well as accounts closed and settled within a period of six years. Yes, that long.
2) You’ll also be seeing reports of checking account overdrafts, as well as whether you missed payments or made them on time.
3) Your report will also show financial links to other people—especially where applying for joint credit is concerned.
4) Bankruptcies of any kind show up as well, so do your best to avoid filing as much as possible.
Ultimately, your credit report shows what could be dragging down a score, and it is your responsibility to comb through it and find what needs to be fixed.
How Your Age Might Affect Credit
It’s been said that old credit is better than no credit. This is especially true when there’s a three-decade difference between you and someone you love—say a parent. They’ve had time to make mistakes, rectify them and ultimately earn the kind of credit score that will get them what they need without a lot of questions asked.
Hard to live up to, if you’re younger? Not really, if you apply the same kind of fiscal discipline your parents did throughout their lives. Paying bills of any kind on time is, of course, a no-brainer, as is making sure you keep tabs on any other spending you do.
So what’s the best score? A perfect score is 850, but a good score is 720—though it must be said that lenders look at different criteria for approving people for loans of any kind.
So whether you’re looking to build credit for the first time, or trying to build it back up again, keeping track of what your credit report says is extremely invaluable thing to do.