The views expressed in Economy Matters are not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System.

Editor's note: Throughout Economy Matters, "Southeast" refers to the six states that, in whole or in part, make up the Sixth Federal Reserve District: Alabama, Florida, Georgia, Louisiana, Mississippi, and Tennessee.

Financial Tips from the Atlanta Fed: Credit Smarts

October 1, 2019

photograph of a customer handing a payment card to a smiling merchant at a cafe or juice bar

This month we observe Get Smart about Credit Day on October 17, which provides a perfect time to learn more about your personal finances and your credit. These tips can help you understand your credit situation and improve your credit smarts.

  • A common misconception is that checking your credit report will lower your credit score. When you as a consumer pull a credit report using AnnualCreditReport.com,Off-site link the only source for free credit reports authorized by federal law, it is considered a soft pull and will not affect your credit score.
  • Your behaviors and financial responsibility can have an impact on your credit score. Your payment history is the biggest component of your credit score. Adobe PDF file format As such, paying bills on time can result in a higher credit score and lower interest rates.
  • Understanding your debt-to-income and debt-to-credit ratiosOff-site link will help you better understand your creditworthiness.
  • Managing debt involves understanding how much debt you have and developing a strategy to reduce debt levels.Off-site link