Explaining What Good Credit Is Exactly Good credit should not be a mystery. It is actually very straightforward. Financial institutions pay a credit bureau to compile information about consumers. These reports are similar to high school and college grade transcripts--instead of collecting grades, credit bureaus collect credit information. There are three credit bureaus that compile information about your credit history. They are Equifax, Experian and Trans Union. The types of information collected includes, timeliness of payments, lines of open credit, credit limits, type of loans taken out, credit inquiries and any judgements. This will be made more clear when you see this example. Issuer Credit Line Balance Payment History Citibank Visa $2300 $345 111112xx111132 First Card $1000 0 111xxxxxxxxxxxxx Sears $700 0 xxxxxxxxxxxxxx As you can see, the credit report lists the lines of credit and who the creditor is. Credit lines are also listed. Payment history is also tracked. "x" means inactive for that month, "1" signifies an on-time payment, "2" signifies 30 days late, "3" signifies 60 days late, and so on. Your goal should be all "1's". To get good credit, you should: Keep your own checking account and savings account Get a copy of your credit report (see below) Establish a credit card in your own name. Most college students at four year schools are approved easily. Pay bills before the due date Know how a loan officer looks at your credit report To find out what the credit bureaus have compliled on you, you can write them at: Experian National Consumer Assistance Center PO Box 2002 Allen, TX 75013 To order report: 1-888-397-3742 To report fraud: 1-888-397-3742 Web site: www.experian.com Also try www.annual credit report.com for a FREE report Trans Union Consumer Disclosure Center P.O. Box 1000 Chester, PA 19022 To order report: 1-800-888-4213 To report fraud: 1-800-916-8800 Web site: www.transunion.com (There is a processing fee.) Also try www.annual credit report.com for a FREE report Equifax Credit Information Services Equifax Credit Information Services, Inc P.O. Box 740241 Atlanta, GA 30374 To order report: 1-800-685-1111 To report fraud: 1-800-525-6285 Web site: www.equifax.com (There is a processing fee.) Also try www.annual credit report.com for a FREE report Ways credit bureaus can make college student credit mistakes: your dad has the same name relative with a similar name relative with a similar social security number anyone with similar name or social security number The "Fair Credit Reporting Act" protects you from incorrect information hurting you. If you find that you are getting turned down for credit and think that there's something fishy, you should get a copy of your report. You have the right to challenge incorrect information. Next we'll learn to use a credit card as a financial tool... © 1989-2005 United College Marketing Services. All Rights Reserved.