Credit 101

A Video Guide to Credit Basics

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How to build good credit, when to close a credit card, why to check credit reports — personal finance experts addressed these and other credit basics in a Google Hangout coordinated by Bank of America and the Khan Academy on Monday.

The panelists highlighted the importance of regular credit checks, because as Farnoosh Torabi, a personal finance journalist with Yahoo! Finance, put it, a strong credit history means saving money.

Credit.com CEO Ian Cohen explained the significance of good credit with the hangout host, Sal Khan of Khan Academy, along with Torabi, Branden Recker of GreenPath Debt Solutions and Rob Habgood of Bank of America.

“The very best rates you’re going to get … generally happen when you reach a credit score of 750,” Cohen said during the discussion, adding that scores between 680 and 720 will also help consumers qualify for credit at good interest rates.

The experts touched on several crucial points of credit health, including credit score composition, how certain behaviors affect credit scores and who looks at credit reports. Among all the topics covered, the conversation came back to the main point: Consumers should check their credit as often as possible, whether that’s through pulling annual credit reports or using free tools like the Credit.com Credit Report Card.

Knowing and understanding one’s own credit history is not only a key component of managing personal finance, it will also help individuals identify areas in need of improvement that will help them save money and reach financial goals in the future.

The hourlong conversation – along with other videos – is available for viewing on the Better Money Habits website, and it offers insightful information for consumers looking to manage their credit.

Image: iStock

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