Is It Time For A New Credit Report in 2021?

A lot of people believe that credit scores don’t matter. They are under the impression that these scores do not affect them in any way because it has no impact in their everyday lives. We have to remember that credit scores aren’t only useful for small businesses, entrepreneurs, and companies. Your credit score can affect your capability in securing automotive and home loans.

But let’s put that aside and focus on the main idea “are credit scores important”. The quick and easy answer is yes, and we will tell you why. Maintaining good credit is not a requirement yet it isn’t too hard to manage. Consider this, the only reason why you would get a bad score is if you did not pay your debt on time. Which is your responsibility since you acquired such a debt.

Always remember that we should break free from the norm that embraces bad credit. Let’s stay on the good side and learn how we can maximize and fully understand credit scores.

Background on Reporting Agencies

Reporting agencies are responsible for maintaining records or credit data. There are three leading agencies in the U.S., Equifax, Experian, and Transunion. These agencies are responsible for keeping track of credit scores for consumers and are capable of providing them to those who need them. You are also given leniency due to the pandemic to access these records once a week in comparison to only having annual access.

The advantage of having an overview of your credit score will already give you an idea of what loans you are credible enough in securing. This will also serve as a reminder for you to resolve issues and conflicts that reflect bad credit.

Rules about Acquiring Your Credit Reports

Only accredited agencies in your country can issue your credit report. In the U.SIt is within The Fair Credit Reporting Act of 1970 that if any person denies your insurance, loan, or employment due to bad credit reports can be held accountable for what they have provided if you were falsely accused.

Your credit report is visible once every year and would only be replenished the following year. Due to current situations brought to us by the pandemic, you may access these reports through the agencies once a week until further notice. All three agencies are covered by these changes.

Make sure that all the information with regards to your identity matches your credentials. Agencies may have instances wherein they would falsely provide records and reports due to the similarity of identification records.

Credit reports issued by the reporting agencies must only be given to authorized personnel and businesses.

Things That Influence Your Credit

• Payment history (35%): It is the highest percentile that lenders will have to rely on. The reason why they are providing such a loan is they want to ensure that they are getting their money back. This would explain why your payment history would affect your report.

• Amounts owed (30%): About your history in paying off your debt, the money you owe with other loans, and how you are capable of managing and sustaining them will also play a factor in your score.

• Length of credit history (15%): How long have you been using credit and how long have you been paying it on time.

• New credit (10%): Checking on how much you have applied so far and how many accounts were opened. Checking if you would be drowning in debt.

• Credit in use (5%): How many accounts do you have and how are you managing them.

The overall score will showcase whether you have a good or bad credit report and it will also determine your capability to pay. Lenders, companies, and those who would need these reports will have a glimpse of your payment history and management capabilities.

Online Tools and Websites

As mentioned, the recording agencies in the U.S. that are accredited to showcase your credit report are accessible on a once-a-week basis till April 20, 2022. However, you may be wondering if some online tools and websites will provide you with the same information quickly and easily.

Truth is, there are, however, you still have to be cautious with regards to the reports that they publish for you. These reports generated through their platforms are only estimated with their free versions and would still rely on your reports from the accredited recording agencies once paid.

Some examples of these tools and websites are:

• Credit Karma

• Discover

• WalletHub

• Chase

• Credit Sesame

• Credit.com

• PrivacyGuard

In the end, these tools and websites are sourced from the accredited recording agencies and would have the upper hand in helping you understand your credit score and walk you through ways to improve them. It would be your choice whether or not you would need their services or work on it all on your own.

Here at Carolina Money Minders, we aim to provide and equip you with the necessary knowledge to fully grasp your financial needs. We can cover your management issues and your credit reports all in one service. Allow us to walk you through the process and ensure that you are taken care of.