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To
Your Credit
You want things. In fact, you have a list. You want to replace
that college futon with a real couch, and those milk crates
with an actual dining table and chairs. You want a laptop
partially so that you can fit in with the Starbucks
crowd, and mostly because you’re realizing more and more that,
no matter what your contract says, your work day isn’t over
at 5 o’clock. You want to replace grandma’s oh-so-lovingly
bestowed hand me down Buick LeSabre with a reliable hybrid.
You may even have a far-off dream of a home with a garage
to park that hybrid in!
It’s normal to want things. It’s also normal to postpone
getting them because of a lack of cash flow. So, if opening
a savings account is still not checked off your To-Do list,
welcome to the world of credit.
Credit is defined as confidence in a borrower's ability and
intention to repay. People use the credit they have with financial
institutions, businesses, and individuals to obtain loans.
Credit is a remarkable thing – provided you manage yours well
and use it responsibly.
No doubt you’ve begun to build your credit
history already. But do you know what that record
looks like to the bank? Are lenders lusting after you, or
do they cringe at your credit rating?
It is possible to secure your financial future. Start by
getting a copy of your personal credit report. See first-hand
the same information available to bankers, realtors, car dealers,
etc. Double check the report for errors. When I got my credit
report, for instance, I realized my first credit
card ever – one I had cosigned by my parents
while I was still in high school – was never closed. The card
was long gone, but I apparently had forgotten to deactivate
it. I won’t make that mistake again. Luckily, my blunder was
not serious. But did you know that nearly 1 in 4 credit reports
contain errors grim enough to disqualify a person from buying
a house, opening a bank account, or getting a job?
Obtaining your credit report protects you against fraud,
too. In a world where it’s all too easy to assume someone
else’s identity, it’s crucial to make certain your affairs
are in order. Crooks can use your name to open lines of credit
and simply change the billing address. If you aren’t getting
the bills, you’ll have no clue your name is being smeared.
You could already be a victim of identity
theft and not even know it! It pays to be proactive
and review your credit history now.
So how do you get your credit report? Ask the teller at your
financial institution! Mine suggested Experian,
TransUnion,
and Equifax
as three reputable reporting agencies, but there are dozens
more. According to AnnualCreditReport.com
you can obtain your free credit report once every
12 months from each of these nationwide consumer credit reporting
companies. And remember to look for one that not only provides
you a list of open credit lines and outstanding loans, but
also one that shows your
credit score and gives you a comprehensive analysis.
Don’t despair if it’s not the star-studded report you may
have been expecting. There are ways
to improve your credit and qualify for better
loans and lower interest rates.
Please be aware that obtaining your credit report sometimes
comes with a nominal cost. Read the fine print. Take the time
to research the best option for you. A little work now will
save you time and money later! |
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