Let’s talk about credit

How can I make credit work for me?

 
Credit is money given to you now by someone who expects you to pay them back in full later. Knowing how credit impacts your life, money and decisions is pretty important. Using someone else’s money usually comes with some costs. The length of time you use the money, the interest rate and fees are all important costs to consider.

 

Having good credit can impact much more than an interest rate on a car or credit card. A landlord may check your credit before accepting your application for a new apartment. An employer may check your credit report before hiring you. Utility companies will require a deposit from customers with poor credit or previous utility shut offs. And insurance companies identify poor credit as a risk and in most states charge a premium to these customers.

 
Want to know what’s on your credit score? Use this guide to access your report for free.

What’s the difference between my credit history and credit score?

When you use credit, companies report your payment history, total unpaid debt, number of loans, age of accounts, amount of unused credit, new applications for credit, and credit accounts in trouble to credit bureaus who keep records of your history. This history is called your credit report. Your credit report is summarized by a scoring model to give you a credit score which usually ranges from 300-850. If you have a higher score, you’re more likely to get approved for a loan or a credit card, plus more likely to get a lower interest rate, saving you money when you borrow. Get to know your score and what you can do to improve it or keep it healthy.  
 
If you want to take a deeper dive into understanding credit, check out the free, online Credit Cred course from the Federal Reserve Bank of St. Louis.