Establishing or Rebuilding Credit Scores

Your credit scores are prepared by FICO and other companies and are mainly based on your history of managing debts, such as whether you tend to make payments on time.  Your scores play a significant role in your everyday life because the next time you apply for a loan or credit card—or perhaps a new apartment or insurance—your scores could affect the final decision, including your costs.

For many consumers with damaged credit scores and those with no credit record, here are some ways to improve your credit scores.

1. Consider consulting with a reputable credit counseling service.
2. Understand what information is most likely to influence your credit scores.
3. Obtain and review a copy of your free credit report.

For more information, click here.

Teaching Suggestions

• Ask students if they know how to obtain their free credit reports from credit bureaus. If they already have received their credit report(s), did they find any errors?
• What can you do if your credit report contains erroneous data or records of someone with a name similar to yours?

Discussion Questions

1. Why it is important to review your credit files every year even if you are not planning to apply for a big loan?
2. What are your legal remedies if a credit reporting agency engages in unfair reporting practices?