Uses of Credit and credit report

Credit

In simple language, credit is something based on which you can borrow money to buy things pay for services or to say to purchase goods and services. Huge organizations such as banks and credit card companies decide if they can lend you money or not, in order to assure that you will be able to repay in the future of not, they check your history of spending and repaying debts through credit reports. 

How is credit measured and tracked? Credit Score: 

They take all that information from your credit report and turn it into one special number. This number is called your FICO score or credit score. It's like your financial reputation score. A high score means you're good at paying back loans and keeping your promises.

How can I examine my credit report? 

A credit report is like a credit card of your money, It is a detailed document that keeps track of your money and the way you manage your finances. 

In the US three major agencies create credit reports which are: Experian, Equifax, and TransUnion. Now, sometimes these three companies might have slightly different things on your report because not all companies tell them the same stuff. The big companies usually get the info, but the smaller ones might only tell one or two of them. Now, everyone in the US can check their credit report once a year for free. 

There's a website called AnnualCreditReport.com where you can do this.

It is important to check it annually even the Experts say it's a good idea to look at your report card every year, especially before you do big things like buying important stuff or if you think someone might have messed with your money info because of a security problem.

Steps to build a good credit report:

• Start Building Good Credit Now: Don't wait for the right time, instead start working now, start paying you bills on time, start working on your debt and start maintaining good credit now. 
• Fix Your Fiscal Habits: There are ways to improve your credit score, start jumping on to good fiscal habits and start managing your financing. It's like giving your financial reputation a makeover.
• Credit Cards Can Help: Believe it or not, using credit cards wisely can boost your credit score. Just remember not to go overboard.
• Get on the Road to Good Credit: It's a journey, and every good financial choice you make is a step in the right direction to make a good credit score.

The Dos and Don'ts: There are certain things you should do, like paying bills on time and using credit responsibly. And there are things you should avoid, like missing payments or taking on too much debt. The time you seriously start analysing these things and making the right decisions is the time you will boost your credit score.

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