Building a Strong Credit Report from the Beginning
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In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
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Sometimes a lower credit score is expected depending on your stage in life or credit usage. If you’re young, or if you are just starting out in your financial life, you probably don’t have a very high score yet. Similarly, if you have a thin credit file or don’t have an extensive credit history with which to fill out your credit report, your credit score is also probably going to be lower than that of people with 20 years of credit history behind them.
If you fall into any of the above categories, you’ll need to prove your creditworthiness and improve your credit score by taking several important steps, including building your credit history and establishing good behaviors.
Components of your credit report
The same categories of information are in everyone’s credit report:
How to establish good credit behaviors
Lenders will look to your credit file to determine the answers to the following questions:
If you have a thin credit file, lenders won’t find the answers they need—and they’ll look at you as a higher risk. However, as you open accounts, move or relocate, take out loans, open utility accounts, pay off debt, and move around in the financial world, your credit file will get thicker. Your credit history will soon start to reflect who you are in the financial world.
Once you establish good behaviors, such as paying on time and staying well below your available credit limit, your credit score will likely improve. The formula is different for every borrower, but good behaviors like these will be reflected in your credit score over time. Lenders can then look at your score and get a better idea of what kind of borrower you will be.
If you’re starting out in your financial life or if you need to straighten out your finances, see some of our other resources to help improve your creditworthiness and get on track with good financial habits.
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