Tuesday, January 25, 2011

Credit History And You

How you handle money can say volumes about who you are. Credit reporting companies track your payment history and supply this information to credit card companies, financial institutions, and other lenders. They use the information to determine if they should loan you more money. When you turn 18, you will be in complete control of your credit destiny. That being said, shouldn't you know all the facts so you can get a great understanding of what is ahead?

A credit report contains all your personal information, previous addresses, social security number, current and previous employers, and estimated income. It contains detailed information about each credit card account you own: the type of account, the balance you owe, and your payment history. Your credit report also includes information on any loans you have – like student loans for college – or if you ever declared bankruptcy. All of this information is what reporting agencies use to assign you a credit score. This 3 digit score can make or break you when it comes time to get a loan.

It is a good thing to know what your credit report says. Check it once a year! Go to the Federal Trade Commission web site for information on getting a free credit report. One you turn 18, when you apply for a job, a background check often includes a check of your credit report. The three major credit-reporting agencies provide a modified version of the credit report called an "employment report." An "employment report" is not a complete report. However, it includes information about your credit-payment history and other money habits. Current or potential employers might draw conclusions about you based on this information.

Unfortunately, a bad credit report can work against you in your search for employment. Employers often use your credit history to judge your level of responsibility. If you are not reliable in paying your bills, then they question if you will be a reliable employee.

In addition to your payment history, an employment report typically includes information about your former addresses and previous employers. Employers can use this as one way to verify the accuracy of information you provide on an application or resume.
Building a credit history

Building a solid credit history is important. How do you do that? By getting and using a credit card wisely. A good credit history will help you get a good rate for a car loan and eventually a mortgage. Those with good credit pay less for loans.

Have some questions when it comes to credit reports? Give us a shout and let us know what you need to know!

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