How To Use a Credit Report

Credit Report and Score

A credit score is a mathematical expression based on a level analysis of a person's credit files that represents the creditworthiness of a person. It is mainly based on credit report information sourced from credit bureaus. Reviewing your credit reports helps you capture early signs of identity theft and to verify that the information on all your credit reports is accurate and up to date.

Free Credit Report

You can get one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies You can order all three free credit reports at the same time or one at a time.

Lenders like banks and credit card companies use credit scores to:

1.) Assess the probable risk posed by lending money to consumers.

2.) To alleviate losses caused by bad debt.

3.) To determine who qualifies for a loan, at what interest rate, and what credit limits.

4.) To determine which customers are likely to bring in the most revenue.

How to Get Good Credit

Paying your bills on time every time gives you a good credit. If you have missed any payments, catch up on them and stay current.

Avoid getting too close to your credit card limit because credit scoring personnel look at how close you are to being maxed out. It safe to use your credit card no more than 30 percent of the total credit limit.

Having a long credit history helps improve your score. The more experience you have with getting credits and paying them off on time, the better your chances of having good credit.

Applying only for the credit that you need helps improve your scores. Applying for a lot of credit over a short duration of time lowers your scores because it appears to lenders that your financial status has changed negatively.