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BUSINESS Thursday 9 January 2020
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Millennial Money: How to take charge of your credit in 2020

By AMRITA JAYAKUMAR once a day or once a year.
Associated Press Stous says people often
By now, you’ve encoun- think utility payments help
tered the world of credit, their scores, but with most
whether it was renting your scores, they don’t. These
first apartment or figuring payments can only hurt
out how to pay for a kitch- them if you are over 30 days
en remodel. late on a payment. Then,
Whatever your financial the bill may be charged off
goals this year, your credit or sent to a collector, who
is likely to play a role in can report it to the credit
achieving them. Take a bureaus.
fresh approach to your Another common mis-
credit by brushing up on conception — especially
the basics: What really mat- among millennials — is that
ters for your credit score? having many credit cards
What’s the difference be- is bad for your score, Stous
tween a credit score and says. As long as you keep
credit report? Once you’ve your credit utilization low
revisited the basics, sit back and space out applica-
and enjoy the perks of tions, having a number of
good credit: a shot at re- cards isn’t bad, he says.
wards credit cards, lower This June 10, 2015, file photo shows a chip credit card in Philadelphia. WHAT’S THE DIFFERENCE
mortgage or car loan rates Associated Press BETWEEN A CREDIT SCORE
and more. AND A CREDIT REPORT?
Here’s your crash course its. The phrase “ your FICO of your FICO score, while you charge on credit cards “The credit report is the de-
on credit, and tips to make score ” refers to FICO 8, the auto lenders look at an au- each month relative to tailed history of how you
your score shine. version typically used in to-specific FICO score that your credit limits. This fac- borrowed money,” Bishop
HOW MANY CREDIT SCORES lending decisions. If you’ve ranges from 250 to 900. tor, known as your credit says. You have three: one
DO I HAVE? used a free credit score When you’re tracking your utilization ratio, “compares each from Experian, Equi-
The short answer: Many. service or seen a free score score, look at the same how much of your credit fax and TransUnion, the
There are two major credit- through your bank, it’s likely version each time — oth- you have available com- major credit bureaus. Your
scoring companies: FICO the VantageScore 3.0. Both erwise, you’re comparing pared to how much credit credit reports contain loan
and VantageScore. “Both scores range between 300 apples and oranges. you are using,” Bishop says. and credit card payment
take into account the same and 850. WHAT REALLY MATTERS FOR Other factors, such as how records, personal data to
factors, they just have a Lenders decide which ver- YOUR SCORE? long you’ve had credit, the identify you, addresses and
different way of weight- sion of your score to use. Following two rules puts mix of installment loans and information from public re-
ing them and creating a “If you go to a car dealer- you on the path to a good credit cards you have and cords such as bankruptcies
score,” says Tasha Bishop, ship, they might pull a score score: Pay bills on time and how recently you applied and foreclosures. While it
director of digital innova- that’s different from when use less than 30% of your for credit matter much less may seem strange, credit
tion and development at you apply for a mortgage credit card limits — the low- in your scores. reports don’t include your
Apprisen, a nonprofit credit or when you sign up for a er, the better. WHAT DOESN’T AFFECT MY credit score.
counseling agency in Co- cellphone,” says Daniel “Lenders want to know SCORE? FICO and VantageScore
lumbus, Ohio. Stous, a certified financial that you make your pay- Knowing what doesn’t af- use data from your reports
FICO and VantageScore planner at Flagstone Finan- ments and make them on fect your score will spare to calculate scores. Errors
make different versions of cial Management in Lin- time,” Bishop says. This has you from needless worry. on your reports can hurt
scores that lenders, em- coln, Nebraska. the biggest impact on your For example, checking your scores, so disputing
ployers and landlords use Mortgage lenders gener- scores. your own credit score nev- them with the bureaus is a
to size up your credit hab- ally consider older versions Next, look at how much er hurts it, whether you do it smart move. q