You’re in control: Understanding credit scores and reports

You make your credit work for YOU, not the other way around.

Knowledge is power when it comes to understanding your credit score and report.

While you might think these are only made for grown-ups, it may be time for you to get serious about them. ‘Cause if you want to score more credit cards in this lifetime, you’re going to need regular financial health check-ups to stay in the credit game for good.

Let’s break it down a bit:

Credit Score

Your credit score is like your financial report card with a magical number (ranging from 300-850), telling banks and lenders how trustworthy you are with borrowed money.

Your score results from a mix of things like how promptly you pay your bills, how much credit you’re using compared to what you have available, and how long you’ve had your credit cards and loans.

To harness the power of your credit score, it’s crucial to comprehend how it’s calculated and the factors that impact it. Your payment history carries the most weight. And you can keep your score in top shape by maintaining a track record of timely payments.

If you want to take it up a notch, keeping credit card balances low and diversifying your credit portfolio can positively influence your credit score over time.

Credit Reports

Meanwhile, your credit report is a detailed record of your credit history compiled by credit bureaus, like CIBI and TransUnion.

Like credit scores, credit reports provide a detailed breakdown of your credit history, including timely and missed payments, credit utilization, credit mix, and any negative marks like bankruptcies and foreclosures.

Checking it monthly to spot any errors or red flags can make the process to fix them up pronto before it hurts your credit score.

Now, why is all this so important? Here are a few reasons why keeping an eye on your credit score and report is crucial:

1. It’s better to spot errors early. Catching any mistakes, major or minor, on your report keeps you away from trouble, like getting unfairly rejected in credit card or loan applications.

2. Prevent identity theft. Monitoring your report can alert you to any suspicious activity.

3. Negotiate better terms. A strong credit score can lead to better interest rates and loan terms.

4. Plan for the future. Understanding your credit situation today can help you set goals and make moves to improve your finances.
   

The bottom line? Knowing the ins and outs of your credit records gives you control over making your credit accounts work for YOU. By arming yourself with information and taking proactive steps to manage your credit responsibly, you’re gaining confidence and clarity in return.

Don’t have a credit score yet? Instantly check yours via the Lista app for only P199!