You’re probably well aware that your credit score is a three-digit number found in your credit report, which includes your loan payment history as well as credit card balances and debts. Companies like FICO and Experian have credit score models to help users calculate and monitor their credit scores, as well as find out ways to rebuild their finances. Though credit scores seem shrouded in secrecy, it’s actually a lot simpler to manage your credit than it sounds.
Let’s take a look at the four credit truths that companies don’t tell you about your credit score.
1. Good Credit Isn’t Hard to Build
People overthink credit. Plain and simple. If there’s one thing people don’t tell you about managing your credit score, it’s that it’s not as complicated as companies make it sound. Good credit comes down to three factors:
- Paying your bills on time
- Keeping low balances
- Not applying for new credit too frequently
Of course, if you’re hoping for a perfect score of 850, there are a few things you must do for those extra fifty points. However, once you hit 800, it should be smooth credit sailing.
2. Credit Report Companies Make Mistakes
Credit report errors are more common than you’d realize. In fact, according to some studies, around 1 in 5 credit reports contain some type of incorrect information. This means that around 20% of credit reports have mistakes––which is a big deal.
Did you know that if your credit report contained an inaccurate late payment, your credit score could drop down at least 50 to 100 points? These inaccuracies seem harmless, until you realize that they affect millions of Americans every day.
3. Credit Card Frauds Can Steal Your Child’s Identity
Most children aren’t running around toting an AMEX––nor should they. However, giving children credit cards is becoming a more common practice than it was a couple of years ago. According to one source, about 18% of children ages eight to 14 are now carrying credit cards as guests on their parents’ account––which is––a lot.
Under your supervision, this may not seem like a huge ordeal, but your child is more likely to be targeted by credit card frauds for identity theft. If you suspect any suspicious behavior on your child’s account, make sure you report it immediately.
4. It’s Never Been Easier to Obtain a Credit Score Report
It wasn’t too long ago that you had to work a full-time job to find out your credit score, or receive a copy of your credit report. These days, many companies make it easy to discover your credit score and access your report cost-free. If you’re interested in finding out your score, visit any of these credit card issuers for more information:
- Discover’s Scorecard
- Capital One’s CreditWise
- Annual Credit Report
Achieving a good credit score doesn’t have to be hard. With a lot of dedication and discipline, you’ll be on your way to achieving a credit score you can be proud of. For more information about money management, learn more about our money management course.