There are 3 major credit bureaus. Experian, Equifax, and TransUnion. All of your credit information is reported on these every single month. From the on time payments that you had, when you first got your credit card, to the late payment on your car that you accidentally forgot to pay on time for that really hectic month. Everything is reported.
Now when you are being reported to the credit bureaus it generates a credit score. Credit scores range between 300 to 850. The higher the credit score the more respectable you are. It sounds like a game, and it really is, however it is a game that affects our lives. Let’s say, you don’t have bad credit, so anything below 600 is classed as you being a risk. You’re not perfect; you have had some late payments, some over the credit line fees, so you’re not in the 800 range.
Let’s say you have a 700 credit score. 700, is quite a respectable score to have. This way the creditors look at you of being a low risk person. You are still a risk, but not as high as some of the much lower credit scoring people of this world. If you have around a 700 credit score, you should comfortably be able to purchase a house, or a car, or anything that needs credit. Do you need another credit card? With a 700 credit score, there should not be a big problem to get a card with a worthwhile limit, and a fairly decent interest rate.
Now keep in mind, that although a lot of the things you do change your credit score, but a lot of the things that you don’t do affect it to. Yes, I’m talking about identity theft. This is what can destroy a credit score. Even if you have made your payments every month without fail. Someone could be opening up accounts in your name, and making purchases in your name.
One of the best ways to keep an eye on this is through a credit monitoring service. You can get one of these if you have any kind of credit card, just call them and ask them. Even if you don’t have a credit card, you can contact the credit bureaus themselves, and ask for 1 free credit report per year. That way, you can check to make sure all of the information on there is correct, and you can make sure you maintain a credit score as high as you can.