Managing Credit

We have all seen the commercials, "F-R-E-E that spells free creditreport.com baby" so, we all know that we should be checking our credit, but the question is are we checking and do we know why?

Anyone with an active line of credit or prior credit history should review their credit report annually for inaccuracies. Although, freecreditreport.com does not actually provide a free report as they indicate, we may instead visit annualcreditreport.com to view our credit free of charge. Our report will include demographic information such as an address, employment history and of course, credit history as compiled by the three major reporting agencies: Experian, TransUnion and Equifax.

Our credit score is considered to be an accurate prediction of how likely we are to pay our bills. We should check our report and be aware of our credit score as it may directly affect our interest rates when purchasing a car, furniture or even a house. Interest rates determine how much an item will actually cost in the long run. The higher our score the lower the interest rate will be.

For students wishing to live off-campus or for those seniors looking for their first apartment be advised that credit scores may also determine how much the security deposit will be. If the score is low, that usually means a higher security deposit. Credit may also be reviewed by future employers before offering employment.

Credit may be measured by good credit i.e. paying your bills on time and not over spending; no credit which just means no credit has been established; and finally, bad credit i.e missing payments, late payments and overdrawing. FICO is the most popular measure for credit and scores range from 300-850.

So, the moral of the story is to be aware of your credit and report and mistakes that you find. Credit and interest go hand in hand and can affect the overall cost of an item you purchase. At Savvy Student we want to keep you well informed and on your way to financial independence.

Thanks,

Savvy Student