If you are a beginner to credit, you may have a lot of questions. It’s important to get these questions answered before you attempt to obtain any credit. Doing so could save you a lot of money in the long run.

What Is Credit?

Credit is a person's ability to borrow money or to obtain goods for later repayment based on the person's reliability.

How Do You Get Credit?

You can apply for credit through a banker, retailer, dealer, or mortgagor. The retailer will normally run a credit check through one or all of 3 credit bureaus or credit reporting agencies from which is obtained a credit score.

What Is a Credit Bureau?

For consumer purposes, there are 3 major credit bureaus or agencies. Each operates independently collecting and disseminating credit information about consumers. No information is shared between the three. The Bureaus do not make any decisions about whether a specific person should be extended credit or not. However, their collected information is used to assign a credit score to indicate how "credit worthy" a person is.

What Is "FICO"?

FICO is an acronym for Fair, Isaac Company. Fair, Isaac are the authors of a model used to determine a credit score for consumers. This score is often generically referred to as a "FICO Score" though each bureau often uses its own name for this score.

Can I see My Credit Report?

A free annual copy of your credit report is now available to most areas of the country. In addition to your entitlement to a free annual report, you can also get additional reports from each agency at a cost (but sometimes for free).

What If My Report Is Inaccurate

Tragically, errors abound in a credit report and the first step in correcting it is to obtain a copy from each of the three credit bureaus. If you see something that doesn’t look right, contact the credit agency to remedy the situation.

How Can I Improve my Credit Score?

The fastest way to improve your score is to insure your reports accuracy as described above.

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