Get smart about credit: How good – and bad – credit impacts your life

By Maria Perez

Your credit score follows you pretty much everywhere these days. Now is a perfect time to remind yourself how credit can help (and hurt) your daily life.

Getting a job
Prospective employers may use your credit report (with your permission) to decide whether to hire you. Your credit report has information about where you live, how you pay your bills and whether you've filed for bankruptcy.

Getting an apartment
Landlords have access to your credit information, and a low score may mean your landlord rents to a different tenant or charges you a higher security deposit. Utility and cell phone companies will also do the same – if there's negative information on your report, you could be required to pay a deposit, add a cosigner or pay a higher rate.

Getting a loan
Lenders may use your credit report to determine whether you can have a loan, and what the terms of that loan would be. A low credit score often means a higher interest rate and you'll pay more for your loan over time.

Getting a better score
Late payments, bankruptcies, collections and foreclosures can stay on your credit report for up to 7 years, but a collection that's 5 years old hurts less than one that's 5 months old. If you've made a bad decision in the past, it's not too late to improve your money management skills. To get you started, the federal government has advice on how to build and maintain a good credit score, including the Federal Reserve Board's Consumer's Guide to Credit Reports and Credit Scores*

Keeping your identity safe

If your identity has been compromised, acting fast is key. Here are a few signals to look for:

  • Suspicious activity on your bank statements
    This can include withdrawals or purchases you didn't make or can't explain.
    What to do: Contact your bank ASAP, close all compromised accounts and dispute the fraudulent transactions
  • Identify and dispute errors on your credit report
    These might be accounts you didn't open, wrong addresses or employers.
    What to do: Notify Equifax, Experian or TransUnion, request a fraud alert, a copy of your credit report and dispute any errors
  • A company you use has a data breach
    This compromise can range from just your name to your bank account or Social Security number.
    What to do: Notify all creditors with whom you have accounts, including banks and credit card companies

Questions about money management?

Our interactive guides can show you how to get smart with your money – in less than 10 minutes.

Credit scores & reports interactive guide

Get information on your credit score, how it’s calculated and how to protect it


This article is based on information available in January 2018. It is for general informational purposes only. It is not intended to provide specific financial, investment, tax, legal, accounting, or other advice and should not be acted or relied upon without the advice of a professional advisor. A professional advisor will recommend action based on your personal circumstances and the most recent information available.

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