What exactly is credit that you need to know

Credit - what does it mean ?

Generally, “credit” refers to a contractual agreement in which a borrower receives money from another person or institution (usually a bank) with an agreement to pay the money back sometime in the future, typically with interest. For the most part, when people talk about their “credit,” they’re talking about their credit history, which is a record of their credit usage. When you apply for a large loan, such as a mortgage, automobile loan, or small business line of credit, lenders like Chase will take into account a number of factors, including your credit history. A positive credit history may make it easier to get these services because it is an indication that you are financially responsible and have a good track record of paying bills on time.


1.How do I find out if I have good credit ?



You need to find out your credit score. A credit score is a number calculated by a private company to determine your creditworthiness. It’s calculated based on the information on your credit report.

2.Can I earn a credit score without a credit history?

Credit report questions and answers can vary when it comes to consumers with no history of trying to build credit. Four ways you can do this include getting a secured credit card, asking a family member to add you as a credit user, getting a cosigned loan, or earning a nontraditional credit score.

  1. What can you do to help restore my credit score?

Credit Repair Companies usually offer a wide range of services designed to help you restore your credit. Common issues include:

  • Mortgage derogatories

  • Collections

  • Mortgage collection

  • Charge offs

  • Judgments

  • Bankruptcies

  • Tax liens

  • And more

  1. Does closing a credit card affect my credit?

It depends. If you have several credit cards, closing one shouldn’t harm your credit but if you only have one, keep it open. The main thing is to ensure your credit utilization rate is under 30%. If over, pay your debt down so you don’t end up having to focus on credit repair down the road.

  1. Will bad credit affect a job application?

Not usually. The only time bad credit might affect a job application is if the job has fiduciary responsibilities because it suggests you might have poor money management skills.

  1. Can collection agencies collect on old debt?

In some states, there is a statute of limitation on debt collection. If you pay towards an expired debt, it restarts the debt. Also, even if not expired, old debt can often be negotiated to pay less than originally owed.

  1. Are You Disputing Errors on Your Credit Reports?

Once you receive your credit reports, go through them with a fine-toothed comb. From a misspelled name to a credit account you don’t recognize, immediately send a letter of dispute to the credit reporting agency. Do so via regular certified mail, so there is no question of receipt. This will also give you a date from which to count the 30 to 45 days the agency has to respond.

  1. Are You Requesting Validation on Old Debt?

If a review of your credit report shows that one or more of your debts has been sold from the original creditor, send to the appropriate credit bureau a letter requesting debt validation. The more times your credit account has been sold, the less likely they have the supporting documents to prove the debt belongs to you. If they cannot prove it, they must remove it from your credit file.

  1. Are You Checking Your Credit Reports?

If you want to improve your credit, monitoring your credit reports is imperative. This is the only way of knowing what negative listings are dragging down your score. Then, and only then, can you take steps aimed at either having these listings removed, or adding positive credit to offset the negative. For the free credit reports you are entitled to once a year — from all three major credit reporting bureaus.

😊 Thanks for reading 

I’m Daraine Delevante, a Consumer Law Expert whose knowledge and expertise is predicated on accountability and results.

🧑‍🏫I teach average and elite consumers how to repair, rebuild, and restore their credit using consumer laws.

Leave a Comment

Your email address will not be published. Required fields are marked *