Attention all money masters and dream chasers! Let’s talk about why your credit report is a big deal.

Your credit report is like your financial résumé. It shows lenders, landlords, and all the important people how responsible you are with your debts. 

And trust me, they’re looking. 

They use that information, along with your credit score, to decide if they want to do business with you and how much they want to charge you.

But why is this report so important? 

Well, it can impact your ability to do all the cool things you’ve been dreaming of—like owning a home, driving your dream car, or even snagging your dream job. 

When your credit report is rocking with positive information, it tells the world that you’re a responsible borrower who knows how to handle their finances.

And guess what? 

In the good ol’ U.S. of A, there are three major credit bureaus—Experian, TransUnion, and Equifax—that keep track of your credit report. They’re like the guardians of your financial reputation. 

So, if you want to keep that reputation squeaky clean, you need to manage your debt wisely, pay your bills on time, avoid maxing out your credit cards and pay attention to your credit report often.

What is a credit report?

Now, let’s dive into what exactly a credit report is. It’s basically a record of all the times you’ve borrowed money and paid it back (or maybe not). 

It shows:

• when you opened each account 
• how much you borrowed 
• and tracks every single payment you made in the last 10 years. 
• It even keeps tabs on whether you paid on time or were fashionably late by 30, 60, or 90 days.

Oh, and here’s the important stuff. It notes when you were a rockstar and paid off your accounts like a boss. 

But it also doesn’t hold back on exposing the not-so-great moments—like when you defaulted on a loan or got your car taken away. Yeah, it doesn’t hide anything.

But here’s the silver lining. Your credit report also includes any credit inquiries made by lenders and other nosy entities who are allowed to check out your credit history. 

So, keep that in mind before you start asking everyone and their grandma to check your credit.

Why is your credit report a big deal?

Now, you might be wondering why this credit report is a big deal. 

Well, listen up. Your credit report is a major player in your overall financial health. 

It doesn’t spill the beans on how much you make or where you work, but it still gives companies a peek into your mad money skills. 

And if you take care of it, it can open doors to all sorts of opportunities.

Your credit report can affect your ability to borrow

Here’s the scoop. When you want to borrow some moolah, lenders will peek at your credit reports. 

They’re on the hunt for any red flags that could make them think twice about doing business with you. 

Late payments? Not a good look. The more recent and frequent they are, the more concerned they’ll be.

And let’s talk about the serious stuff. 

If you’ve got accounts in collections, gone through a repossession or foreclosure, or even filed for bankruptcy, lenders will definitely raise an eyebrow. 

Those things are like bells ringing in their ears. 

Some lenders won’t touch you with a ten-foot pole if you’ve filed for bankruptcy. Others might consider you, but only if it’s been a few years.

Your credit report dictates your credit score

Oh, and don’t forget about credit scores. These little numbers pack a punch. Credit scores calculated based on the info in your credit report and they predict your odds of paying your debts on time. 

The most popular scoring models, FICO Score and VantageScore, spit out numbers between 300 and 850. 

The higher the score, the better chance you have of scoring that loan. It’s like your credit report in a neat little package that lenders can easily understand.

Lenders use your credit scores to make lending decisions

And trust me, lenders are all about those numbers. They use your credit score to figure out the interest rate they’ll charge you on a loan or if they’ll take a chance on you at all. 

If your score is below 500, they might not even look your way. But if it’s above 750, they’re rolling out the red carpet for you. 

And if you’re in between, well, you might have some options—but they might come with a higher interest rate.

Landlords, insurance underwriters, utility companies, employers and others use credit reports to finalize their decisions

But wait, there’s more! It’s not just lenders who are snooping around your credit reports. Landlords, insurers, and even phone and cable companies want to know if they can trust you too. 

A bad payment history can make a landlord say “No thanks!” or demand a hefty security deposit. 

And those phone and cable companies? They might not even want your business if they see something sketchy on your credit report.

So, my friends, your credit report is no joke. It can make or break you in the financial world. Take care of it, keep those debts under control, by keeping a budget and make building your credit an important task in your daily life.

You don’t have to go at it alone either, you can sign up to FreedomPath’s DIY credit repair and monitoring platform to get started today.