Frequently Asked Questions

 Whether you have “good” or “bad” credit is based on your credit history. Find out what your credit history looks like by checking your credit report. Your credit report has information about whether you pay your bills on time, what loans and credit cards you have (and the amounts you owe), and whether you’ve filed for bankruptcy. The more positive information you have in your credit report, like timely payments and low credit card balances, the better your credit will be. 

 Credit bureaus sell the information in your report to businesses that use it to decide whether to loan you money, give you credit, offer you insurance, or rent or sell you a home. Some employers use credit reports to decide whether to hire you. The strength of your credit history also affects how much you’ll have to pay to borrow money. If there’s a lot of negative information in your report, you might have to pay more in interest. 

 Not usually. Most negative information will stay on your report for seven years, and bankruptcy information will stay on for 10 years. Companies that promise to repair your credit can’t remove truthful information — it takes time to go away. There are exceptions. In certain situations — like when you’re being considered for a job paying more than $75,000 a year, or you’re trying to get a loan or insurance valued at more than $150,000 — a credit bureau may include older negative information on your report that wouldn’t show up otherwise. 

Unfortunately, yes. When you co-sign a loan, it makes you fully responsible for that debt.

If the person who is primarily responsible for making payments defaults and doesn’t tell you, it will affect your score. Since you are legally equally responsible for the debt, the non-payment will be reflected on your report as well. It can remain there for up to a decade.

It is best to avoid co-signing if possible. If you are considering co-signing a loan, try testing a credit simulator. This kind of software helps to estimate the potential effects. With this type of software, you also can input multiple different scenarios to see how your score could be affected.

Having a good report is how you show financial institutions that you are a trustworthy borrower. There are several ways to attain credit.

Opening a credit card account is one of the first steps to take. Alternatively, you could become an authorized user on a family member’s account. Once you are a user of an authorized account, you can utilize it to make purchases. You can also consider using tradeline companies too.

To boost your score, pay balances as quickly as possible, and keep your balance below 30% of your limit. This financial management will show your lender that you are responsible, trustworthy, and can pay back your debts.