When entering adult life, one thing you may not have been told while growing up is how important your credit report and score is. Without decent and consistent credit, taking out loans, opening credit cards, renting houses, and making large purchases can be nearly impossible.

It can even affect how willing people are to hire you. Unfortunately, most public schools do not teach you much about your credit score, and so here are some facts to keep in mind when you begin adult life and start building your credit.

Before we begin though, just a quick refresher course on credit: Your credit score indicates how trustworthy you are at repaying your loans or your bills and debts.

Each time you pay rent, utilities, or pay off a credit card, your credit score increases, proving to others that if they loan you money, you are trustworthy enough to pay it back without much fuss.

However, if you miss a payment or default on a loan, your credit score will decrease, proving to others that you are not as trustworthy as you may want them to believe.

Sometimes, when getting a loan for a new house or leasing a new apartment or other things that require credit, you need to have a minimum credit score to qualify.

This indicates the score they are most willing to work with. It’s all right if your credit is less than perfect, but if it gets too low, you may find out that things are a lot harder to do in your adult life than they were before.

So it is important to be aware of your credit score and do your best to keep it up to a mid-range to high number.

Things To Know About Your Credit Report And Score

One thing that many people don’t know that is important, is that your credit report and your credit score are two very different things. While many websites will give you both, your credit score is a comprehensive list of your credit history, from previous loans to your current bills, to things you have used your credit for in the past.

Your credit score, however, is a number that compiles your credit history and basically gives people an overall indication of your credit worthiness and your credit history.

Another thing to note is that, when you’re just turning 18 and learning about your credit, is that it IS possible not to have credit. If you’ve never taken a loan out or don’t pay any or many bills, you may not have any credit, which is something you will need to fix before making any major purchases.

The final thing worth mentioning is that there are tiny ways you can damage your credit that you might not be aware of. Parking tickets and even overdue library fines can show up on your report and affect your score.

You may not think that something as simple as a ticket or a small fine could affect something as big as your credit, but it most certainly can.

Improve Your Credit Report and Score Today!

So when you are looking into your credit, keep these points in mind when looking at your report and score. If you have any questions, feel free to contact us today. Follow Pyramis Company for more financial tips and advice!