Cashay logo

Empowering your money

Credit score ranges: Here’s what you should know

Banks, potential employers, and lenders all take your credit score into consideration. Here are some reasons why having good credit is important.

Video Transcript

- Information about your credit history is collected by credit bureaus, who then sell this information to lenders, potential employers, or financial institutions. You must authorize the credit bureaus to give out this information by signing a waiver. Negative or false information in your credit report can adversely affect your ability to get credit or get the best loan interest rates.

There are three primary credit bureaus in the United States-- Equifax, Experian, and Transunion. You should obtain a copy of each credit report from the credit bureaus at least once a year to verify that the information they have is correct. If you find that you have incorrect information on your credit report, you should contact the reporting agency for a dispute form, or send your own letter with a copy of your report, clearly showing which items you're disputing and why.

The credit bureau is required to investigate and send you their findings, along with a corrected credit report if changes are made. You build your credit report every time you apply for and use credit. Creditors send information about your credit history with them to one or more of the credit bureaus. When you miss loan payments, pay late, default on a loan, or have debt dropped, that information goes on your credit report. Even legal information, if you have lawsuits or judgments against you, may find its way onto your credit report.

Generally, information remains on your credit report for seven years, although if you file for bankruptcy, that information may remain for up to 10 years. The best way to improve your credit is to have good credit history. If you're just starting out or need to do credit repair, obtain and use a secured credit card, being sure to pay the full balance each month. You don't need the extra finance charges. Stay financially fit, friends.