W.T.F.F. (Working Towards Financial Freedom)

            Today’s post is all about three of the most important financial numbers that we all should know about ourselves but most people don’t. Knowing these numbers can either make our lives easier or harder depending on what they are. What are these numbers you ask? Your credit score , your debt-to-income ratio , and your net worth . If you don't already know these numbers, now’s the time to learn. It may help save you time and money in the long run.  

              So, maybe you’re feeling down in the dumps because you just got turned down for that loan you applied for. Something about you having bad credit. Or, you’ve given up on your dream of buying a house because your credit score is low. Don’t lose hope! You can change those No’s into Yes’s; and your doubt into confidence. 

   Last week, I covered what credit is and how to get started building credit for those who don’t have any. This week I will go a little deeper into credit scores, the different types of credit scores, and what factors are used to measure them.      Now, before I get started I want to make sure one thing is clear: You have more than one credit score! Yes, you read that correctly. We all have multiple credit scores. Why? Because companies report to credit bureaus voluntarily, each company determines which credit reporting agency or agencies they will report to. This means that you could potentially have three different scores for the three major consumer credit reporting agencies (Experian, Equifax and TransUnion); however, while the scores may not be identical in theory, they should be similar.  

     You’ve probably seen commercials offering low interest rates or even a 0% interest rate on car loans for people with ‘good’ credit. Listened to some friends and family members talk about how they have ‘bad’ credit. Possibly were turned down by a landlord for not having any credit. Or maybe even heard an ad from a company offering to fix your credit. And all the while just secretly thinking to yourself ‘What the hell is credit?’