Today we are diving into credit reports. Seem like a weird time to talk credit reports? It’s really not, here’s why:
Why your credit score doesn’t really matter.
What is a credit score? It’s a rating of how good you are at borrowing money. That’s it. Does it help you buy a house? Yes. Get a good rate on car insurance? Sure. Should a good score be major bragging rights? Eh. If you want. What really matters is your credit report. This is where you see fraud, identity theft, and forgotten lines of credit.
Let’s back up though. There are three credit bureaus: TransUnion, Equifax, and Experian. These are for profit companies. They take the data from your purchase history and sell it to companies to market to you. This is how it works. It’s why you get pre-approved credit cards in your mailbox seemingly every day.
You are eligible for one free credit report from EACH of these companies each year. To access these go to annualcreditreport.com. Save your report to your computer because once you pull it it’s gone. It’s also important to note your credit report will not report your score, it’s not the point of them.
Your homework is to pull these reports and see how many lines of credit you have open. Not just ones you have a balance on, but ones you have open that are at zero. Due to the times we are living in, knowing how you can access money is very valuable. Obviously, you don’t want to pull from these lines of credit unless it’s necessary but many of you will find this extremely necessary in the coming months.
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