It can be tempting to use credit cards to cover your "wants" without considering the long-term consequences. However, the financial choices you make today can significantly impact your ability to make important purchases, like a car or a home, in the future. Use credit wisely to build a strong financial foundation.
Credit is the ability to obtain goods or services now by promising to pay for them later. Your eligibility for credit is determined by your credit history.
A credit score is a numerical representation of how likely you are to repay borrowed money. The FICO score, which ranges from 300 to 850, is commonly used by banks and lenders. Many financial institutions now share this score with customers to help them understand their creditworthiness. You can also check your score at www.myfico.com.
Your credit score is influenced by factors such as:
Tips to Protect and Improve Your Credit Score:
If you're building or improving your credit, remember that patience is essential. Improving your credit score takes time and consistent effort.
A credit report is a detailed summary of your individual credit history, prepared by one of the three major credit bureaus: Equifax, Experian, and TransUnion. While reports may vary slightly, it’s a good idea to check your credit report three times a year—once from each bureau.
Regularly reviewing your credit report can help you identify errors, monitor your financial progress, and stay informed about your credit health.
October-November: Equifax
March-April: Experian
June-July: TransUnion
You are allowed to check your credit for free from each of these agencies once a year. Use www.annualcreditreport.com to check each agency based on the timeline above.