friday::FINANCE

TIP::Be sure you know what's in your credit report.

I have always been a little bit confused about Credit Reports and Scores, so I decided I would take the time to do a little research. As part of educating myself I went through the process of requesting and reviewing my own credit history (more on how to do this later). I am still not an expert on the topic, but I thought I'd share with you a few of the basics I learned.

So what goes into a credit report? I have to admit I was a little surprised at how detailed mine was. It contained information about all the credit cards I've ever opened, what the credit limit on each card is/was, my balance and payment history for each statement I ever received and my pending balances, as well as information on any credit cards I have closed. I also found information on how faithful I've been to pay my electric bill, water bill, etc. If I had school loans, a car loan, or a mortgage it would record all those details too.

Basically, a credit report contains a detailed history covering the last 7 to 10 years of any loan or line of credit you have. Even medical related bills may be included, although the names of the medical institutions will not be accessible to those who are requesting a credit check on you. As long as your name is tied to an account as the primary holder, joint holder, or authorized user that account information will appear on your report.

Who has access to your Credit Report? If you are applying for a credit card, insurance, mortgage, loan, or any service from a company that provides services based on your promise to pay, (i.e. the local electricity company) they have the right to do a credit check on you. Also credit card companies that want to extend preapproved credit offers may check your report before expending their offer.

Ideally it would be nice to work on a cash basis only, but because of how our financial system is set up, your credit report is an important link to getting the goods and services you need on a daily basis. In the next couple of posts I will talk about how to get your credit report safely and for free, as well as how to improve your score.

Get to know Heather here.

If you are interested in doing some research of your own, visit the FTC website: http://www.ftc.gov/bcp/menus/consumer/credit.shtm. The information I found there was really helpful and easy to understand.

Remember money is a talent we all have, let’s seek to use it wisely and to the glory of God.

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