Requirement 7 (D)
Requirement
Credit reports and how personal responsibility can affect your credit report
Credit Reports
Your financial choices can follow you into the future. A credit report helps show whether you can be trusted to repay borrowed money. Good credit may matter later when you apply for a car loan, rent an apartment, buy a home, or need other financial help. Building good habits early, such as paying on time and not borrowing more than you can handle, can help protect your ability to use credit later.
How Do Credit Scores Work?
Essential Questions
What is a credit report?
A credit report is a record of how well you have used credit and repaid debts. It includes your credit history, such as whether you pay bills on time and how much debt you owe.
Who keeps track of credit reports?
Companies called credit bureaus keep track of credit histories and prepare credit reports. Lenders may check these reports before deciding whether to offer credit.
Why does a credit report matter?
A credit report helps lenders decide whether you are likely to repay money you borrow. A good credit report can make it easier to get credit when you need it.
How can personal responsibility affect your credit report?
Your choices affect your credit history. Paying bills on time, borrowing only what you can repay, and keeping debt under control can help build a good credit record.
Using too much credit or failing to repay debts can cause problems. You might not be given credit when you need it later for a big purchase.
Helpful Tip:
Just as a baseball card can show whether a player has been a good hitter, pitcher, or fielder, a credit record shows whether a person has handled debt responsibly.
Now that you have become familiar with credit scores,
let’s focus on debt.
