Host(s): Dr. Nancy Lottridge-Anderson, President of New Perspectives, Ryder Taff, Portfolio Manager with New Perspectives & Kevin Farrell, Producer

Topics Discussed: Credit Cards, Credit Scores, and Credit Reports

Email: money@mpbonline.org….(read more)

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Money Talks | Credit: Your Cards, Scores and Reports

In today’s world, possessing good credit is crucial for financial success. Whether you’re looking to buy a car, purchase a home, or even apply for a job, your credit can have a significant impact on your opportunities. Therefore, understanding your credit cards, scores, and reports is essential for maintaining a healthy financial profile.

Credit Cards:
Credit cards are a convenient way to make purchases, but they also play a vital role in building and maintaining your credit. When used responsibly, credit cards can help improve your credit score. On the other hand, excessive spending and missed payments can harm your credit. It’s important to make timely payments and keep your credit utilization low to demonstrate responsible credit usage.

Credit Scores:
Your credit score is a three-digit number that represents your creditworthiness. It is calculated based on various factors such as payment history, credit utilization, length of credit history, new credit, and credit mix. Different lenders may use different scoring models, but the most common one is the FICO score, which ranges from 300 to 850. A high credit score indicates to lenders that you are a low-risk borrower, making it easier to qualify for loans and credit cards with favorable terms.

Credit Reports:
Your credit report contains detailed information about your credit history, including your personal information, accounts, payment history, and inquiries. It’s crucial to regularly review your credit report to ensure that the information is accurate. You are entitled to a free credit report from each of the three major credit bureaus—Equifax, Experian, and TransUnion—every 12 months. If you discover any errors on your report, it’s important to dispute them with the credit bureau to have them corrected.

Improving Your Credit:
If your credit is less than ideal, there are steps you can take to improve it. Start by making timely payments on all of your accounts and keeping your credit card balances low. It’s also essential to avoid opening new credit accounts unnecessarily and to only apply for credit when needed. Additionally, consider using tools like secured credit cards or becoming an authorized user on someone else’s account to build your credit history.

Managing your credit effectively requires diligence and responsibility. By understanding your credit cards, scores, and reports, you can take control of your financial future and make informed decisions when it comes to borrowing and spending. Remember, when it comes to credit, money truly talks.