It all starts with your Credit Score.

Check your Credit Report and find out what’s impacting your score now.


Credit Report:
This is a detailed record of your financial history that is put together by a credit bureau. The credit bureaus keep track of your personal information such as name, address and employment history, as well as credit and loan histories, collection records, filing for bankruptcy, inquiries and tax liens. This information is compiled into one place for a credit bureau to send to a lender to help determine a person’s creditworthiness (ie. how likely a person is to repay their debts).

Credit Score: A 3 digit number that tells banks and lenders how likely you are to repay your debt. This score is a calculation of your payment and credit history, debts, inquiries and a few other factors. There are three main credit bureaus, Equifax, Experian and TransUnion. They have created a few formulas for how to calculate your credit score, the two most popular being FICO and VantageScore. Each score can vary depending on which formula was used to calculate it and they typically range from 300-850, with a higher number being better.

Debt: The amount of money an individual owes. This can be accrued in any number of ways, but at the end of the day, you are still liable for paying it all back. Not doing so in the right manner or at all can severely cripple your credit score and make it nearly impossible to get any loans or financial help in the future.

Debt Consolidation: If you have multiple loans, one option would be to combine them into one loan or repayment plan. You can do this yourself, with the help of a financial institution or through a credit counseling service. One common example of this is if you have multiple student loans, these are often consolidated into one loan to secure a lower interest rate.

Debt Counseling: This is a type of credit counseling service that specializes in helping people with debt issues. They can advise you on the best way to pay off your loans and try to help you save money in the process. A few things they can do is help you consolidate your loans into one large loan, or they can negotiate with your lenders to help spread your payments over a longer period of time to reduce your monthly payments due while trying to keep your interest rates low. To keep in mind, there are some credit counseling agencies that are expensive and can end up hurting your credit score. Make sure to do your research before choosing which agency to work with.

FICO® Score:
What's Your Credit Score?This is a 3 digit number that is compiled from the information found in your credit report, also known as your credit score. This formula was developed about 30 years ago, and today is one of the top industry standards in how it evaluates your credit history. Not all scores from all places will be exactly the same, but they should be roughly similar. This score may be no more than a number, but it’s an important number that can dictate a lot in your life.

Inquiry: This is a request for a copy of your credit report from an institution (typically financial institutions). This is also added to your credit report every time an inquiry was made and can stay on there for about two years. There are two types, a Hard Inquire and a Soft Inquiry. A Hard Inquiry is requesting a report from a credit bureau whenever an individual files a new credit application (an example would be applying for a second credit card). A Soft Inquiry does not show up on a credit report and can be done for a variety of reasons. One example would be asking to receive your own credit report or see if you qualify for a loan.

Interest: This is what you pay a lender or creditor for allowing you to borrow money. Typically this is calculated as a percent of the total amount of money you borrow, and you pay it back over a specific amount of time. Interest is the reason lending out money is profitable if there was no incentive to lend people money nobody would do it. You may not like interest but that’s the cost of doing business, getting a loan is engaging in a service which you do have to pay for.

Credit Utilization: This is the percentage of the credit limit that you use. Typically when you get a credit card, you have a max spending amount, aka. your credit limit. Say your limit is $2,000 on your credit card, whatever amount you spend divided by $2,000 (your limit) is your credit utilization percentage. It is recommended that you only use up to 30% your maximum amount, in the case that you need it for some kind of emergency or something.

Accounting Period: An accounting period, also known as a reporting period, is the amount of time covered by a financial statement. In other words, it’s the time frame of activities summarized in the financial statements. Some statements close quarterly while others will run for a year before they close, it all depends on the kind of statement and preferences of the ones creating them.

Accrued Interest: This term describes interest that is due but hasn’t yet been paid back to the lender. Almost all types of loans are going to have interest attached, so at the end of the loan date, you owe not only the initial loan but any and all interest you may have accrued. Keeping up with your payments will keep this interest as low as it can reasonably be if you are missing payments and racking up the amount of money that you owe, you’re going to end up having to pay more in interest than you regularly would, so it’s worth keeping on top of these things.

Annual Fees: A yearly fee sometimes charged for holding a particular credit card. Most cards do not have these fees if there’s an annual fee associated with a card it should be very obviously stated. This is generally only for premier cards that offer some kind of extra benefits or goodies to you.

Annual Percentage Rate: The APR (annual percentage rate) is the interest rate you are charged if you don’t pay off your credit card balance in full after each billing cycle. Some cards have various rates for different uses, so be sure you know what rates you’re looking at. It can have a massive impact on how much you find yourself owing month to month. To find the monthly interest rate you just need to divide your APR by 12. So if you have a 36% APR, some quick math will tell you that you have a 3% monthly interest rate.

Total Balance: The balance is the overall amount of money you owe on a particular credit card bill. It can change month to month of course depending on what you buy and the payments you in turn make. This is a full balance, it will include accrued interest, late payments, foreign transaction fees, annual fees, cash advances, and balance transfers.

Balance Transfer: A balance transfer is when you take debt from one credit card and move it to a new card with 0% APR for a set period of time (usually 6-21 months). Balance transfers basically just give you more time to pay off the debt, and they can in the long run save you hundreds of dollars in interest charges. Do note that balances can NOT be transferred between cards from the same bank. You will often see a balance transfer fee of 3-5%, so you will have to weigh whether that is worth it for you.

Cash Advance: Right off the bat – cash advances from credit cards are costly and need to be used sparingly. Card issuers limit what you can withdraw in accordance with your total credit limit, and they charge very high-interest rates on the withdrawal. But if you find yourself in a pinch a credit card cash advance could be just the thing that you need.

Credit Limit: A credit limit is the maximum amount of money you can charge to your particular credit card. This is based on your income and how much the bank or lender reasonably thinks they can expect you to pay back. Credit limits are also referred to as a line of credit, credit line, or just a spending limit. If you push past that limit, you’ll find your card being declined anywhere you try to use it.

Minimum Payment: The minimum payment is the smallest amount of money you have to put towards your account to keep it open. The most common minimum payment out there is $25. Minimum payments may also just be a percentage of your current balance that you have to pay off. You have to maintain some kind of payment on your bills, if not the lender will assume you’re just not going to pay them back and as anyone would – they’re going to eventually cut off your card.

Late Payment Fees: If you pay your credit card bill late, you’ll find yourself owing a fee of up to $29 the first go around. After that, any other violations in the same six-month cycle will cost you up to $40 in fees. The best thing you can do for your credit is just make regular payments on time, try your best to do that. If there was no late fee, people would never pay!

Grace Period: A grace period is the amount of time between the end of a billing cycle and when your bill is due. During a grace period, you typically won’t be charged interest on your balance. Grace periods vary by the issuer but must be a minimum of 21 days from the end of a billing cycle. Beware that a grace period doesn’t apply to cash advances or balance transfers.

Prime Rate: The prime lending rate is the best interest rate issuers charge users. The actual interest rate for your credit card may be above the prime rate. If the prime rate changes, often so will your variable APR. So if the Fed increases the prime rate, odds are your variable APR will increase too and vice versa.