Credit
Credit reporting is a system lenders use to decide whether or not to give you credit, or a loan, and how much interest they will charge you.
Your credit report is a record of how much you owe and how well you pay it back. A credit report will also include information such as where you live, whether you’ve ever declared bankruptcy, or whether you’ve ever been referred to a collection agency. Negative credit history usually goes back only seven years; however, a bankruptcy will remain on your report for ten years from the date of discharge. The good news is that positive credit can remain on your report forever. Having more good information helps strengthen your credit history and increases your credit score.
Credit reports are available from three different credit bureaus (Equifax, Experian and TransUnion) that get their information from many different sources, so each report may look slightly different from the others. You will learn how to contact these three bureaus in Activity 16.
It’s possible to place a security freeze on your credit report which will stop a credit bureau from releasing any information without your permission to any new loan, employment, or credit application. You must contact each of the three credit bureaus (Experian, Equifax, and TransUnion). This is a FREE service. You can read more about it at Nerd Wallet: “How to Freeze Your Credit.”
