1. What is a credit report?
Your credit activities are recorded on a credit report.
The report lists any credit-card accounts or loans you may have, the
balances and how regularly you make your payments. It also shows if
any action has been taken against you because of unpaid bills. Any time
you purchase anything using credit, , it goes on your report and affects
your credit score. If you have many late payments, or default on a loan,
that will damage your credit score.
2. What is a credit score?
A credit score is a three-digit number based on your credit
report that lenders, like Skowhegan Savings, use to determine
the risk of loaning to you. The credit score is a number
generated by a mathematical
formula. This formula analyzes information in your credit
report to derive your credit score - a number ranging
from 300 to 850. In general,
scores above 700 represent good credit.
3. How can you find out what is on your report?
You can order a free credit report from Equifax, TransUnion
and Experian once a year through annualcreditreport.com. This will show
you what your report says. It will list all of the credit accounts you
have had, former addresses, and any basic information that affects your
credit standing. There is a fee to see your actual credit score, but the
report will show you all you need to know. Creditors do not have to report
to all three credit bureaus, so it is also a good idea to look at all
three reports. One report could be better than another, leaving you vulnerable
to a poor credit rating.
4. What are the keys to good credit?
Pay your bills on time, keep low balances on your credit
cards, do not open a lot of new accounts at once and pay off debt as
opposed to transferring between credit cards. All these tactics will
help you keep a good credit score.
5. How can you repair your credit report?
Check the report and look for anything that is inaccurate.
Most credit reports have errors on them. Unfortunately, it is your job
to make the credit agency fix your report. Write a letter to Equifax,
TransUnion or Experian (which ever has the mistake on your report);
the credit bureau must investigate any relevant dispute within 30 days
of receiving your claim. Any item that is not verified as accurate by
a creditor is removed.
Remember to keep a record of what you have done; phone calls, letters, etc. You may need them.
For more information see our credit tip sheet.
