Credit report & credit history

0:00- [Instructor] So as you go out into the world, you're going to need people to have confidence that you are going to pay them. Let's say that you're going to pay them the rent. If you are looking to rent an apartment, or let's say you're borrowing money from someone to buy a house, or to get a loan for a car, they need to feel confident that you are going to pay that money back.

0:24And so one way that they can feel more confident about that, is by looking at a credit report. And so what I have here is an example credit report. Not all credit reports will look exactly like this. In fact, they'll all look a little bit different, but they all have the same property.

0:42They're going to have information about you. And usually it's not something that you're just gonna be able to print out and hand to someone else, because they'll, they might say, hey, I don't know where you got this information. Usually you're going to have to give them some personal information and they'll run the credit report and they'll get back something that looks like this.

0:59As you can see, you can see some personal information, names, social security number, date of birth, et cetera, address here. That gives them confidence, you are who you are, who you say they are. But then above and beyond that, you will see things like your credit score.

1:16Now what's a credit score? Well, that's a score that gives that lender or that landlord a sense of how likely are you going to pay things back. The credit report report we're looking at actually has two different credit scores, and usually they're on a scale of 850 or 900 depending on what you're looking at.

1:35So it's good to know the scale, but the higher the better for something like a credit report. And this one over here, it says why that score is what it is. It says, well, this is based on things like, and we don't have to go into all of the details here, but the number of accounts that are delinquent, delinquent accounts are accounts that weren't paid back or not paid back on time.

1:59This one over here says, total of all balances on bank card or revolving accounts is too high. That's saying that this person has a lot on their credit cards. It's not necessarily bad to have credit cards, or in fact it can be good for your credit score and to be able to borrow a lot of money.

2:13But they look at, if you're borrowing a lot of what you're capable of borrowing, then you might be a little bit riskier. But you can see these scores. Once again, give that lender, give that landlord, a sense of how likely you are to pay things back. Now another thing that you'll see is payment history, and some type of sense of what you've done in the past.

2:32And this goes into a lot of detail right over here. I mean sometime they'll give employment history and things like that. These are all related in terms of how likely you are to pay things back. If I keep scrolling on this one, it gives a lot of detail. It talks about different accounts that I have in different places, how much money I borrowed from different folks.

2:51You can see my credit cards or other payments that I have to make here. And I had looked at this earlier, they even have a place where you can see how many things are delinquent by different dates. And delinquent once again means that I haven't paid it back on time.

3:08So there is a lot of detailed information about this thing. So when you're paying people back or not paying people back, people are keeping track of it and they're going to use that information to tell other future people that you might borrow money from, or that you might have to pay money to.

3:23This one right over here, again, it's giving a sense of how your payments were over a period of time for this account, right over here. I already looked over the types of credit it has. In fact, that's what I've been listing through, is the different accounts, the different types of credit, the length of credit, how long you've had these accounts and your history of hopefully paying things back.

3:44There are things like credit inquiries. If there are a lot of people looking into your credit, that's a sign that you might be trying to borrow a lot of money. So once again, if I'm lending to you or if I'm your landlord, I want to look at that. So we don't have to go into all of the detail right now, but you just need to know that a credit report is a pretty detailed summary of your financial history that people that you wanna borrow money from or your landlord, is likely to run, is likely to look at, and you should know what's on it.

4:15And ideally have as good information as possible there based on good financial decisions, so that those folks feel good about lending you money, or letting you lease their apartment.