If you are a young adult eagerly waiting to turn 21, it’s the age to open a credit card account. This is not just a credit card account but one without a cosigner. Whether you are starting from scratch, guarding yourself against identity theft, improving your credit or buying a home, there are a few important facts everyone should know about credit.
Here are some of the five important and mostly misunderstood things about credit:
1. Each Person Has Three Credit Reports
There are three national credit bureaus where individual credit reports are gotten from. They include Experian, Equifax and Transunion. They independently maintain and collect financial records on their consumers. This shows that each and every information on each credit report is significantly different from another.
In most cases, consumers are not always aware on which bureau that will be used for their next application. Therefore, it is necessary to always check all the three national credit bureaus at least once every year. First, services usually obtain these credit reports in a 3-in-1 credit report for a loan pre-qualification borrower.
2. There is safety in Checking Your Credit
Rumors always has it that checking data on your credit on your own can harm your credit score. This is not true as hard inquiries only occurs whenever a creditor has to check their credit especially for application purposes. Checking your own credit reports and credit scores can be done safely as more often as you can want to without causing damage to your credit.
3. Expiry of Negative Information Takes Place After 7-10 Years From the Last Activity Date
Negative information such as regarding late payment and bankruptcy filings are one of the most fundamental facts you need to know about credit reporting system. Such information can remain on your report until 7-10 years term. This expiration period does not change even when you decide to pay your debt or make any changes on your account.
Closed accounts is an example of a positive record that is paid late, can stay on your credit report for even more than seven years.
4. Keep Your Credits Active
One of the most important things one can do to keep their credits healthy is to always keep them active. Keeping your credits active can be achieved by at least using one credit card on a monthly basis. This can help you pay all your monthly bills on time for consistent addition of new positive information to your credit report.
Allowing your credit cards stay dormant or have too many accounts closed can make positive reporting to slow down and thus making even credit scores to drop. The only solution to this is to keep up a longer and stable credit activity for a better credit score.
5. Everything is Always Up To You
Credit agencies works to maintain records on consumers that are accurate with lots of updates they make on a daily basis. Credit report accuracy depends on your input because it is only you who can identify and report any kind of errors that can be made and any sign of theft.
Regularly reviewing credit reports can help you check on the accurate information needed for making corrections.
Visit https://www.crediful.com/ to learn more and understand everything about credit.