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How Often Should You Check Your Credit Report?

Why Is A Good Credit Score Helpful?

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How You Can Raise Your Credit Score If Itís Low

 

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Why Is A Good Credit Score Helpful?

A consumerís credit history is the barometer for their financial health.

There was a time when good credit was only important in securing a loan for a large purchase, such as a house. Nowadays, a personís credit history affects every aspect of their life, from jobs to rates on car insurance. Consumers with poor credit will have a lot of doors closed to them.

There are three major credit reporting agencies in the United States: Equifax, Experian and TransUnion. Each agency compiles a credit report on consumers based on their financial histories. Financial histories include bank accounts, credit card accounts, auto loans and even bankruptcies and foreclosures. Any time a consumer has taken out credit, it is included in their report.

Credit reporting agencies use that information to assign a credit score to consumers. The score is ascertained through calculating a mathematical algorithm, which extracts data from the report to generate a three-digit number. Scores can range from 300 to 850. Consumers who have a credit score of over 700 are considered financially stable and desirable individuals with whom to conduct business. Individuals with scores under 500 generally do not secure new loans or credit, and can be subjected to much higher interest rates than their financially-stable counterparts.

There are many reasons why a good credit score is helpful.

In addition to resumes and interviews, employers also have begun to give credence to potential hiresí credit histories. In a recent nationwide survey, 69 percent of employers admitted to using an applicantís credit report as part of the hiring process. The Fair Credit Reporting Act requires any employer who wishes to view a potential employeeís credit report to first seek permission from the person. Persons with higher credit scores are seen as more honest, hardworking employees and employers will lean toward hiring someone with an excellent credit score over someone with a poor one.

Credit card companies also use a consumerís credit score to determine whether they wish to extend credit to that individual. Consumers who have excellent reports can expect to receive unsolicited offers from credit card companies quite frequently. Credit card companies want to do business with those who are financial stable, offering lower interest rates and other incentives to encourage them to open accounts.

Mortgage lenders also tend to provide better interest rates and loan terms for those with a good credit score. When applying for a mortgage, most brokers prefer consumers whose credit score is at 700 or higher. These are borrowers who have solid financial lending histories and are seen as very low risk for defaulting on a mortgage. Those with scores under 700 can find themselves subject to higher interest rates, which in turn results in larger monthly payments.

Utility companies also determine whether to provide service based on a personís credit score. Most utilities are paid for after they have been used by the consumer, making this a very risky venture for the utility company if a person has bad credit. Utilities have little recourse other than stopping service if a person fails to pay for the gas, electricity, water, phone or cable services they already have used. If a consumer has a bad credit score, it can affect whether a utility company chooses to provide service. TopConsumerReviews.com has reviewed and ranked the best credit repair services available today.

I've Been Trying to Get My Free Credit Report Online. It's Basically Hell.

While Kevin's on vacation, we've invited other Mother Jones writers to contribute posts. Some of you probably saw my post about the frustrations I encountered trying to freeze my credit with the Big Three. From the feedback, it sounds like some of you ...

Published:  Sat, 23 Sep 2017 03:00:00 GMT



How Belgium deals with credit without Equifax, Experian, and TransUnion

Credit reporting in the U.S. has been dominated by three companies, Equifax, Experian, and TransUnion, yet many people don't even realize that these companies are compiling massive files on them. And now that there's been a breach, they don't like it.

Published:  Fri, 22 Sep 2017 14:57:00 GMT



Fed Chair Janet Yellen warns: Monitor your credit report!

Federal Reserve Chairwoman Janet Yellen on Wednesday warned millions of Americans to scrupulously monitor their credit reports following a "very serious data breach" at Equifax. "We would really urge consumers to be very careful in monitoring their credit ...

Published:  Tue, 19 Sep 2017 22:51:00 GMT



Herbert Lin: Credit reporting protections are backward

In the wake of the hack of credit reporting agency Equifax, many people have suggested that affected consumers implement credit freezes to prevent the misuse of their sensitive personal data. Equifax, which originally tried to charge consumers for this ...

Published:  Fri, 22 Sep 2017 23:45:00 GMT



How to Unfreeze Your Credit Report

In the aftermath of the Equifax breach, many experts and pundits are recommending Americans to freeze their credit reports. Freezing your credit report can be a good move to help protect yourself from someone stealing your information, opening accounts and ...

Published:  Wed, 20 Sep 2017 15:42:00 GMT



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