Credit information every borrower should know
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Credit report information affects your financial
health. But exactly how much affect does it have on your day-to-day life?
Every piece of information contained
in your credit files at the three credit bureaus (Experian, Equifax &
TransUnion) contributes positively or negatively to your credit score.
The credit score, being a single number, is used in computerized decision
systems with great frequency.
You may be aware that your credit
score affects your ability to get the home loan you desire, including
interest rate, down payment amount, points paid and more. But did you
know that auto insurance rates are often affected by your credit score?
How about all those credit card offers you receive in the mail and the
high or low interest rates they offer? Of course auto loans and other
major purchases will have their interest rates and payments decided by
the information in your credit report.
It's all based on your credit
score. Scoring models are very precise, yet the process of creditors reporting
millions of bits of data frequently to the credit bureaus creates opportunities
for errors. Other ways credit scores can be negatively affected outside
of payment histories are through frequent name changes with marriages
or divorce, fraud & identity theft, or simple human error.
That's why every consumer
should understand three little-known keys to credit health: