What you'll learn
- Define credit report and credit score
- Identify habits that can affect credit history
A credit report records information about borrowing and repayment history. A credit score is a summary based on credit-report information. Lenders, landlords, insurers, or other organizations may use credit information depending on rules and context.
Habits that can matter
- Making payments on time.
- Keeping balances manageable.
- Avoiding unnecessary applications for credit.
- Reviewing reports for errors or signs of identity misuse.
Scores are not moral grades
A credit score is a risk-estimation tool. It does not measure a person's character, knowledge, or potential.
Example
A missed payment may affect a credit history. Setting reminders or automatic minimum payments can reduce the chance of forgetting.