Good Credit, Better Choices

March is National Credit Awareness Month. Do you know your credit score or how it impacts your financial future? Do you know that your credit score can affect your ability to get a job, how much interest you pay on a loan and even whether you can get a cell phone?

Your Credit Report and Credit Score                 
A credit report is a compilation of everything you are doing with your credit today and what you have done with it in the past. A credit score is a mathematical representation of the information in your credit report. It can tell a creditor, potential employer or even a landlord, at a glance, whether you are a good risk.

What Is Considered On A Credit Report?
Credit reports include data such as payment history and debt to available credit ratio on a lot of things. Included on that list are mortgages, home equity loans, car loans, student loans, credit cards and personal loans. Credit inquiries, employment history, collection accounts and account summaries are also included on your credit report.

What Isn’t Considered On A Credit Report?
Credit reports do not consider on-time utility and phone bills, checks that you have written or cashed, debit cards or daily expenses you pay with cash.

Why Establish Good Credit?
There are countless routine and often life changing activities that are easier and less costly with established good credit. This especially applies to large purchases. When you are borrowing money for a home or car, the terms and rates offered to you will typically coincide with the quality of your credit score and credit history. If you need a cell phone, a small personal loan, insurance or even an apartment, your credit may be considered. Many landlords use credit as a way to identify potential good tenants. Even your career may depend on your credit score. Before an employer hires you they make check your credit rating. That means poor financial decisions can ruin your ability to get a better job.

Keeping It Clean (Or Making It Better)
Talking credit does not have to be a source of anxiety. Improving your credit score or keeping your credit report clean isn’t that difficult with a little effort and common sense.

  • Pay your bills on time- If a bill is paid late it can show up on your credit report for up to seven years
  • Know your limit and never max out your cards – Need we say more?
  • Use your cards wisely – Keep balances low and pay them off every month. It is never a good idea to maintain a big balance on a credit card, even if you plan to pay it off soon.
  • Remember to use your credit – One way to improve a credit score is to use credit wisely. Demonstrating that you can and will pay your bills on time is better than never using your credit at all.
  • Check your credit report- Comb through your credit report three to four times per year, looking for mistakes or for accounts that do not belong to you. Not only is it helpful in maintaining a good credit score, this act can help you identify signs of identity theft. The Federal Deposit Insurance Corporation (FDIC) says that you are entitled to one free copy of your credit report every 12 months from each of the three nationwide credit bureaus — Equifax, Experian and TransUnion. Although you can ask to receive copies from all three credit bureaus at the same time, you also can spread out your requests throughout the year to check for major changes or inconsistencies. To order your free reports, go to or call toll-free 1-877-322-8228.

Overwhelmed? Take a moment this month to see what your credit says about you. Once you know what your credit report says, you can begin taking steps to improve that message and to improve your financial future!


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