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:

• How credit reporting works
• How credit scores work & credit score meaning, and
• How to monitor and correct credit files in the event of errors, identity theft or fraud.
• How to get your free credit report online