User talk:Chaffincreditconsulting

Credit Reports and Score Basics

Let’s face it… When someone says to you “lets pull your credit” even the stoniest of hearts beats just a bit quicker. Credit reports are scary. One wrong move and you can loose your house, car, scholarship, and future potential.

Many individuals either don’t know to check their credit before starting a financial endeavor or they leave it to the “professionals” (remember not all credit professionals know what they are doing!). However, there are a few basic concepts that greatly help when pulling your own credit.

The key term here is “keep it simple stupid.” First of all don’t simply cross your fingers and hope for the best with your credit report and score. Even the most savvy financial experts pay a bill late every once in a while without knowing that they crossed the 30 day point and have been negatively effected. Check your credit before you step foot in whichever financial institution you are hoping to partner with.

Know the difference between a credit score and a credit report! The websites you see advertised on TV are generally scams. For instance, did you know freecreditreport.com is actually being sued by the state of California? The only true credit score is called a “FICO score” – this is the score obtained by legitimate financial institutions. You can obtain this score by going to myfico.com. Credit scores are also NEVER free! To obtain a true credit score it is in fact a bit expensive; credit scores generally cost $20 a piece.

However, credit reports, without the credit score, can be free. Consumers are allowed “one” free report a year ( the word one is in quotations because in fact this is not true in Massachusetts! – more on this in future blogs). To obtain your reports you do NOT have to sign up for anything. All you have to do is go to http://www.annualcreditreport.com, enter in your information and viola! you now have access to your credit report.

Make sure to save your report or print it out immediately! Credit bureaus want you to pay for your reports. They hate giving reports away for free. So as soon as possible print or save what you have! They will time out on you and in general make the information extremely easy to lose. The only way to save a credit report (you will not be allowed to copy and paste) is to save it as a PDF; make sure you have a PDF program on your computer before obtaining your report. If you do not know how to obtain a free PDF program please ask!

Also, know the difference between a soft inquiry and hard inquiry. A soft inquiry does NOT effect your credit score. Inquiries are soft when you look at your own credit reports and credit scores. Inquiries are hard and DO knock down your score when you have someone else pull your credit (such as a bank or car dealership or when you apply for a credit card). Hard inquiries HURT you. Try not to apply for anything unless absolutely necessary.

Always try to be prepared when you walk into a situation that impacts your finances. Do not allow someone to surprise you with something regarding your own finances! Pulling your own credit report takes less than ten minutes and provides you with the necessary information to take charge of your future!

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