Good Credit History

Knowing your credit score, and how the decisions you make influence it, can give you more control over your personal finances. Credit reports should be checked at least once a year to ensure accuracy and prevent identity fraud. You may annually access one credit report for free from each of the major bureaus for a total of three free credit reports per year. An easy website to use when retrieving your credit report is www.annualcreditreport.com

Click here for a breakdown of how your FICO score is determined

THREE MAJOR REPORTING AGENCIES

Equifax
Information Service Center
PO Box 740241
Atlanta, GA 30374
1-800-685-1111
http://www.equifax.com

Experian
National Consumer Assistance Center
PO Box 949
Allen, TX 75013-0949
1-800-682-7654
http://www.experian.com

TransUnion
2 Baldwin Place
P.O Box 1000
Chester, PA 19022
1-800-888-4213
http://www.transunion.com

GOOD DEBT VS. BAD DEBT

"Good debt is investment debt that creates value; for example, student loans, real-estate loans, home mortgages and business loans." -Eric Gelb, CEO of Gateway Financial Advisors

"When you buy something that goes down in value immediately, that's bad debt. If it has no potential to increase in value, that's bad debt.” -David Bach, CEO of Finish Rich Inc.

Good Debt                                       Bad Debt

Mortgage                                         Credit Card

School Loan                                     Store Credit Card

Business Loan                                  Auto Loan

EFFECTIVE STRATEGIES TO BUILD GOOD CREDIT

  • Always pay your bills on time. This is the single best way you can show creditors that you’ll be responsible with your money.

  • Build up your savings account. It’s good to make regular deposits, no matter how small. Lenders like to see a consistent savings pattern.

  • Be choosey about your credit cards and loans. Apply only for the ones you REALLY want and keep them for a long time.

  • It’s better for your credit score to maintain a low balance on one card and pay it off each month than to have no balance at all!

  • Piggyback on someone else's good credit. The fastest way to establish a credit history can be to "borrow" another's record, either by being added to a credit card as a joint account holder or by getting someone to co-sign a loan for you. Make sure the person you piggy back from also has good credit though!

CREDIT CAN GREATLY IMPACT YOUR FUTURE…. HOW?

Depending on how you handle your lines of credit, the decisions you make during college can have a positive or negative impact on your financial future. The decisions you make today will reflect on your credit report for the next 7-10 years. There are a number of people who look at your credit report for a variety of reasons including:

  • To purchase home, car, or any other large purchase

  • To rent an apartment or house

  • To start a cell phone plan

  • Some employers access credit reports before hiring a new employee; bad credit is a red flag to employers and could ultimately cost you the job.