Credit Reports Are Like School Report Cards
By Brian Williams on Friday, September 28th, 2007 :: 10:00 amCategory: Watching Out 4 You
An easy way to understand your credit report is to think back to your school days. Your report card was an account of your academic progress.
Today, your credit report gauges your diligence about paying bills and handling other money matters. Good or bad credit gleaned from a credit report determines:
- Approval or denial of auto loans, mortgages and other consumer credit loans
- Interest rates on loans and credit cards
- Whether or not you can get certain jobs
As an adult, a bad credit report creates plenty of anxiety – the same as in a child coming home with a bad report card. Not to trivialize, a credit report obviously carries more weight than a report card. In addition to your credit report, you should find out your credit score, which can range from 300 to 900. Credit bureaus use five factors to determine your credit score:
- Payment history
- Outstanding debt
- Types of credit you hold
- New Credit
- Length of credit history
If you always pay bills on time and carry little unpaid debt on credit cards or loans, then it would be like getting an “A” on your credit report card. On the other extreme, if you consistently make late payments, have several credit cards and loan defaults, along with a bankruptcy on your credit report, then it would equate to an “F” on your credit report card.
Students from elementary school to college seek extra help when they have trouble with a particular subject. You can seek debt help – like credit counseling, debt consolidation or debt settlement – to untangle your debt problems and reduce your outstanding debts depending on your situation.
Author bio: Brian Williams, a graduate of the University of Texas at Arlington, has 11 years’ experience writing and editing at daily newspapers in Texas. Learn more MyUSADebt. MyUSADebt is your alternative to debt consolidation.
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