Credit Basics

Your Credit Report

This is a detailed record of your credit history. It includes information about your loans, credit cards, and payment habits. It’s like a financial resume that shows how responsible you’ve been with money.

Your Credit Score

This is a number between 300 and 850 that represents your creditworthiness. The higher the number, the better. It’s like a financial health score that lenders use to decide if they should lend you money.

The Credit Bureaus

These are organizations (Experian, TransUnion, and Equifax) that collect and maintain your credit information. They’re like detectives that keep track of your financial behavior.

Lenders

These are banks or other financial institutions that lend money. They’re like judges who use your credit report and score to decide if they should lend you money and at what terms you should be offered.

Remember

The system is in place to charge you money. It helps to pay your bills on time and don't borrow more money than you can pay back so the you can maintain a low DEBT TO INCOME RATIO. and a low CREDIT UTILIZATION RATIO. This will help you acheive and maintain a high credit score