Most people are familiar with their credit score, but are you familiar with your credit report? If not, you should be. This is a summary of open and closed accounts over the years, both positive and negative, that creditors and lenders use to determine if they will loan money to you, or what interest rate. It gives them an overview of your financial habits, such as:
- Making payments on time or late
- If you repay loans as agreed (full payment each month, not a partial payment)
- Do you have anything in collections?
This information gets reported to the 3 credit bureaus (TransUnion, Equifax, and Experian—the ones who provide the credit reports) from various sources, including merchants, utility companies, banks, court and public records, and creditors. For example, if you’ve made late payments on your electric bill, the electric company will report this and it will show on your credit report. While it won’t stay on your credit report forever, it will stay for 7 years, and so it’s best to get caught up so it can at least be changed to a positive status, especially if you are looking for a new place to rent or applying for a new loan or line of credit. Having negative information on your credit report is a red flag to potential lenders that your past financial behaviors will carry over if they lend money to you.
Even if you know your credit reports only have positive information because you pay all of your bills and debts on time, it’s still a good idea to check your credit reports throughout the year. Doing so will let you catch any errors or show if you’ve been a victim of identity theft. Go to annualcreditreport.com to access all three credit bureaus’ reports.
Normally, you can view each of the three bureaus one time per year for free, and many people will space out their credit report views every 4 months throughout the year. However, due to COVID-19, everyone is allowed free weekly access until April 2022.
Ask your local county Extension office if you have any questions. The Family and Consumer Sciences Agent may be able to help or even do a private one-on-one session. In Pasco, you can email Shari at Sbresin@ufl.edu with questions or if you’d like to attend a financial education workshop.