Your Daily Real
Estate Blog
From
Supreme Manor
Real Estate Services
What is Credit?
Having good
credit is quite important, but what is credit? In order to improve your credit
you need to know how credit works, what hurts it, and how you can manage it. Hopefully
this blog will help.
What is Credit?
Credit is your
reputation as a borrower. It tells others how likely you are to repay your
loans. Credit is made up from information about your borrowing history. Most of
the information comes from your credit reports.
What is a Credit Report?
A credit report
contains information about your borrowing history. Lenders (and others) provide
information that ends up on credit reports. They report how much you’ve
borrowed, how you’ve repaid, and other details about your borrowing behavior. When
somebody wants a credit report, they request one from a credit reporting
company - or "credit bureau".
What is a Credit Bureau?
Credit reporting
agencies collect - and then distribute - all of this information about you.
They are information warehouses, and if they have erroneous information your
credit can suffer. There are 3 main
credit bureaus: TransUnion, Equifax and Experian.
What is Credit Scoring?
Credit bureaus
have a ton of information. There are hundreds or thousands of lines of
information about you in their database, and it’s difficult for lenders to sort
through all of it. As a result, most companies use credit scores instead of
reading through everything in your credit reports. Credit scores are numbers
generated by a computer program that runs through your credit reports. It looks
for patterns, characteristics, and red flags in your history. Based on what the
program finds, it spits out a credit score.
What is Credit Used For?
Credit was
originally used for lending decisions. Nowadays, credit scores and reports are
used in other areas of your life. Consumers and lawmakers constantly watch what
credit is used for, and figuring out if it’s fair or not. In addition to
lending decisions, credit is used for insurance and employment approvals.
I hope this information is useful.
Should you need assistance with any of your real estate needs,
please contact Supreme Manor Real Estate Services 773-881-9224. Feel free to visit us on our website or any
of our social media sites.
Have a Supreme Day!
Sheila M. Wilkinson-Sanders
Managing Broker/Owner - CPA, GRI, CNC
Supreme Manor Real Estate Services
1840 West 95th Street
Chicago, IL 60643
(773) 785-0127 Direct
(773) 797-9640 (fax)
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