6 Credit Definitions You Need Know

Poor credit and unsteady financial standing can make many aspects of your life much more difficult than they need to be. Your credit follows you wherever you go, and it can affect your ability to get a job, rent an apartment, or secure new lines of credit. For this reason, it’s important to prioritize your credit health and always make sure your finances are in the best order that they can be. 

As a consumer, it’s important to educate yourself on all of the financial aspects that affect your credit. Make sure that you’re aware of how your open accounts will increase or decrease your credit score and how certain financial mishaps are reflected on your credit report. Certain occurrences like a vehicle repossession, late payments, or a defaulted account will result in negative marks on your credit report. These types of negative marks can remain on your report for many years. 

Check your credit report regularly to ensure that all information is accurate and up to date, and to determine some benchmarks to improve your credit standing over time. All consumers are entitled to one free credit report each year from all three of the credit reporting bureaus. 

For more background on credit and how it works, read this article from Forbes to familiarize yourself with the terms credit report, credit bureau, credit score, hard inquiry, soft inquiry, and debt-to-income ratio.