Understanding Credit Reports and Scores in 2009

Reader Question: With everything that's going on in the economy right now, I feel like I should have a better understanding of my credit reports and scores, how they affect me, etc. What should I understand about these things in 2009?

Whether you meant to or not, you touched on many topics all at once! :-) It has always been important for consumers to understand how credit works because it affects us in our daily lives. You also pointed out another economic truth -- understanding credit reports and scores will become even more important as we enter the 2009 economy, and all the unpredictability it brings with it.

In truth, it's tough to know where to start when answering a question like yours. It's a great question. It just covers a lot of ground. This entire blog is about understanding credit reports and scores as they relate to you, so you might start by reading through some of the previous Q&A sessions we've done.

With that being said, I'll try to make list of things you should understand about your credit in 2009 and beyond. This is certainly not an all-encompassing lesson on the subject, but just some of the things I feel are important.

• Understanding how your credit reports work and what they include is a good place to start. This information is used to produce your credit score, and that's what lenders will use (among other things) when considering you for a loan.
• It's also important to check your credit information for errors once a year or so. You are entitled to a free yearly credit report, so make use of it. If you find errors, start the dispute process to get them corrected.
• If you don't understand what's included within these documents, check out our guide to reading a credit report. It will help you make sense of the information.
• Financing will be harder to come by in 2009 than in years past, due to the economic crisis we are currently dealing with. This means you need a higher credit score in order to get a decent interest rate on a loan. Understanding how all of these things work together is the first step to success. So keep up your research!
• In addition to reviewing your reports, you should also understand where you stand with your credit score. If it's lower than average, focus on raising your score in 2009. If it's already above average ... congratulations. Work hard to keep it that way!
  

I know this doesn't answer every aspect of your question. But as I said earlier, understanding credit reports and scores is a very broad subject. It's also an important subject to understand in 2009.

So if this blog post leaves you with some more specific questions on this subject, please feel free to submit them the same way you submitted this question. There's no limit to how many questions you can submit. We want you to have a solid understanding of this subject. So fire away.

I hope that helps you out some, or at least gives you some direction for further research. Good luck.