Credit reports - whole lotta words, can I get a few pictures?
Consumers check their credit score through their banking apps or credit card accounts. But what information is the basis for that 3 digit? Hello, credit report. Remember doing book reports in school? You gathered a lot of information and detailed it in an organized manner. Then turned in said work of art for the teacher or professor to offer a determination on the information provided. That determination could range from failing to surpassing expectations and is reflected in either a letter or number. That determination meant that you either needed to improve your understanding of the information provided, or you already demonstrated proficiency.
Similar concept for the relationship between credit scores and credit reports. A consumer’s numeric credit score is based on facts collected in their credit report. As a financial culture, we are well versed in understanding the credit score range. It is three digits, and described as poor, fair or good. We understand that the credit score impacts how much we have to pay to use finance products such as loans and credit. But how close are we to the information on our credit report? Potentially less so.
So how do we read our credit report? I looked for a picture or infographic to summarize how a consumer can read a report so I didn’t have to use a lot of words. You’re welcome! 😊 Transunion HK came through. The infographic describes the five main portions of a credit report – Account Summary, Personal Information, Credit Inquiries, Credit Accounts and Public Records. (The Credit score is a bonus section). I recommend that a consumer regularly review their credit report. It is an account of your history with credit, so you should be educated on what is presented to potential lenders. If your credit score is out of step with what you believe it should be, take the necessary steps to request your credit reports from all three credit bureaus and review the information for accuracy.
Next week, we will talk about the three credit bureaus – Experian, Equifax and Transunion.
Last week, I challenged you to run a utilization calculation. This week, I will be the kinder, gentler coach and let you choose your own adventure. 50/70/100 principle. Do you want to face the uncomfortable, incremental or vital? No matter what you choose, you can tackle it! We are here to help. letstalk@studiomfinancial.net or (469) 615-0387. Until we meet, keep working on the change.