River Valley Credit Union

Credit Facts You Should Know Pt. 2

Posted on May 23, 2022 at 8:09 AM by Noa Finken

In part 1 of our Credit Facts You Should Know blog series, we covered the basics of credit reports and scores. This time, we cover some less known (but just as important) facts regarding credit.


1. Negative information will come off your report over time

Negative items, including late payments, collection accounts, foreclosures, and repossessions, can significantly lower your credit score. However, their effect is not permanent. As long as your credit behaviors show signs of improvement, negative items will have an increasingly smaller impact on your score as time goes on.


In addition, the majority of negative items should only be on your report for 7 years max. This is a result of the regulations set by the Fair Credit Reporting Act. Although, bankruptcy can last up to 10 years.


2. Your credit report can help you discover fraud

Frequently checking your credit report can alert you to fraud or identity theft because it shows all of the accounts that were opened using your personal information. If you come across an account that you did not open, you’ll want to take action in order to protect your identity from further harm.


3. Your credit score can cost you money

Generally, the lower your credit score is, the higher your interest rate will be on credit cards and loans. This can result in paying thousands more over your lifetime in the form of interest.


4. Joint credit scores don't exist

There is no such thing as joint credit reports or scores. A credit card account opened by you and your partner, for example, will appear on both of your reports and will also affect each of your scores. Though, you and your partner’s credit history, report, and score are still separate.


5. It's possible to obtain a loan with bad credit

While it can be more difficult to secure a loan when you have bad credit, it’s not impossible. However, these loans usually have higher interest rates, as mentioned earlier, or require you to put something up as collateral. The latter means the lender can take ownership of your property if you don’t pay them back for the loan.


Contact our lending team for more information or to schedule a consultation: (515) 232-1654


Noa Finken

Marketing Specialist



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