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Credit is all sorts of fun. At least, we at Credit.com think so, but we also realize not everyone shares our enthusiasm. The mention of credit scores, loans, credit reports and the like are known to make people cringe, and that’s understandable. It’s not the easiest thing to wrap your mind around.

1. It’s Confusing

There’s a lot to keep track of when trying to understand your credit: What helps it? What hurts? How do I get it? Why should I? There are many answers to these questions, and opinions vary widely. It can seem easier to avoid the subject rather than try to understand it.

But everyone needs to know the basics: You need to use credit to have a credit history and improve your chances of being able to access credit in the future; you should take out only credit you can afford and pay your bills on time.

Everyone is entitled to a free annual credit report from each of the three major credit bureaus: Equifax, Experian and TransUnion. Knowledge is empowering, so take a look at your reports (and get any errors corrected). Credit scores are based on these reports and are used to help lenders decide whether to extend you credit, so you should have an idea of your credit scores, as well. Credit.com offers two scores used by lenders through its free Credit Report Card, which also shows you how your financial behavior has a positive or negative impact on your scores.

2. They’ve Been Burned

Much as you wouldn’t trust a cheating ex or backstabbing friend, those who have had bad experiences with credit often want nothing to do with it, if possible.

There are many reasons people may be grappling with credit. Perhaps they went through bankruptcy, were hassled by debt collectors, struggled with credit card debt, were misled by lenders or had to repair their credit after identity theft. Mistakes on credit reports are also common — and aren’t always easy to resolve.

Whether or not the credit troubles were the consumer’s fault, bad experiences sting, especially when it comes to finances. But the only way to build credit is to work on it.

3. Some Good Habits Don’t Count

Congratulations, you have a great-paying job! Too bad it doesn’t help your credit scores. Income isn’t part of credit reports, which is a positive if you don’t make much money. It makes sense that it’s not about how much money you make but how you manage that money, though some people find that frustrating.

And rule-followers don’t always see the fruits of their good habits. You may pay every utility bill and send the rent checks on time, but these are rarely reported to credit bureaus. But if you miss a loan or credit card payment, it could get sent to collections and result in a negative account on your report; your years of paying rent on time aren’t documented on your credit report to balance out that one mistake.

4. It’s Easy to Screw Up

Speaking of mistakes, all it takes is one to screw up your credit for several years. Some mistakes are bigger than others: Taking on a mortgage you can’t afford is a huge mistake that could lead to foreclosure and seven years of a black mark on your credit report.

If you miss a credit card payment, even if it’s just a little late by accident, your credit score could drop quite a bit, especially if you have otherwise pristine credit.

Medical debt is a prime example of this. Medical bills make up more than half of outstanding collections accounts in the U.S., and sometimes consumers hear about them for the first time from the collector, rather than their insurance or healthcare provider.

5. It’s Overwhelming

There are dozens of different credit scores, and you seldom know which one your lender is using. So are you supposed to keep track of every credit score you have? Absolutely not. The most important thing is to establish good financial habits — check your credit reports for inaccuracies and periodically review credit scores so you can see changes over time.

And if you don’t like what you see? Low credit scores and negative accounts on your credit reports may be demoralizing, but they can serve as tools for improving your situation going forward.

More on Credit Reports and Credit Scores:

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