In order to safeguard the consumer’s reputation and credit score rating, they need to review and relearn ways to protect themselves.
Some of the things the consumer needs to revisit are the following key ideas:
• Does my family have a financial plan for the future
• Am I borrowing wisely and paying back promptly?
• Have I identified, avoided and recovered from various financial pitfalls?
• Have a gotten a recent copy of my credit report and do I understand it?
Everyone at some point in time has applied for some type of credit, whether it be for a auto, boat, RV loan, a home mortgage or a credit card. The consumer has normally been approved for a loan based upon their ability to repay the loan, cash flow and their credit score.
The key to being a good credit risk is based upon the consumer’s credit score. This score is a numerical number assigned to the consumer based upon their credit history. This history is based upon number of opened and closed accounts, payment history, including late or missing payments and collection referral, original credit limit, current balances, etc. The higher your credit score is the better your ability to borrow at more favorable interest rates. The lower the score the consumer is charged a higher interest rate or decline altogether.
Basically, the consumer needs to obtain a copy of their credit report from one of the following three credit bureaus: Equifax, Experian or TransUnion. These companies’ reports will explain where the consumer stands when compared to other borrowers along with explaining their financial score.
