Make Ends Meet: Debt and credit scores

Don’t panic over what a bad credit report may say about a person — it can get better with some work and a few wise decisions.
Published: Aug. 19, 2021 at 8:10 PM EDT|Updated: Aug. 20, 2021 at 12:36 AM EDT
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LOUISVILLE, Ky. (WAVE) - It has been a tough year and a half as people try to find their way out of the COVID-19 pandemic.

Following a year of lockdown, people are ready to have some fun and maybe spend a little money. It could be the perfect time for someone to check their credit score before pulling out the credit cards or cash.

“If you have had bad credit, it’s more important than ever to start turning things around by making responsible and positive impact to your credit scores,” Senior Credit Industry Analyst Nathan Grant said.

Poor credit can make it harder to get a loan for a home or a car, Grant said. It can mean higher interest rates and a higher price for auto, renter’s, and homeowner’s insurance. Employers may even run a credit check before offering someone a job.

“That number, those credit scores, those are helping them determine how risky you might be,” Grant said. “It’s called your credit worthiness.”

Don’t panic over what a bad credit report may say about a person — it can get better with some work and a few wise decisions.

“You can really just say anytime, ‘Alright, I’m going to turn things around,’” Grant said.

Changing a score in the credit game may not be as hard as someone may think. Grant said one of the biggest threats to a good credit report is a late payment.

“Even a single late payment can remain on your credit report for seven years,” Grant said.

It’s also important to pay more than just the minimum payment due on a credit card or loan.

“Paying your balance off in full every month is the ideal you want to shoot for,” Grant said.

Checking credit history can help establish what hurt and what may have helped the credit score.

“You really want to take the time to look yourself to see where you stand,” Grant said. “If you don’t know where you stand, you really can’t make the educated decisions to improve that. There’s a lot that goes into your credit scores.”

If any errors are discovered in a credit report, people have the right to dispute them. Equifax, Experian, and TransUnion should provide a free credit score every year, but during the pandemic, there has been an increase in free access to credit reports.

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