We all need good credit. But what is credit? It is important to know what it is, how
it works, how it can be hurt and how you can manage it.
What is Credit?
Credit is who you are as a borrower. It tells lenders, creditors, employers, insurers,
landlords how likely you will be to repay or pay your financial obligations. It is the
information about your borrowing history.
What is a Credit Report?
A credit report is a record of your history as a borrower. It contains information
about how much you have borrowed, how you’ve repaid it and how many times
you have attempted to secure credit. It also contains your personal information,
name, address, social security number, and it may record your current and former
What is a Credit Bureau?
Credit Bureaus or Credit Reporting Agencies are agencies that collect, store and
distribute the information to those who inquire. If they information they have
is inaccurate, if there are mistakes or accounts that may not be yours, it can be
damaging to your credit.
What is Credit Scoring?
The credit bureaus calculate a score based on several factors of the information they
have in their database for you. They have a model that generates a score based on
this information and the factors and it determines your credit score based on that
information and their formula.
What is Credit Used For?
Credit information is used by lenders and creditors to make decisions of your credit
risk. Credit and credit scores are also used by insurance companies, landlords and
employers to make determinations.