Credit Reports

I have little credit history so I used my mother’s credit report as an example for me to learn from and share information.

The first thing I noticed was her FICO score. She told me she purchased it and it was not really part of her credit report. It is a good idea to get it so you can see where you stand. The score ranges from 300 to 850 credit points. When you have a high score you can select from a wide range of credit cards and loans. For the most part, it would be hard to get denied when you have an excellent score. With a good score you also will receive better interest rates. When you have a low score there are some negative marks on your credit report.

There are three different credit bureaus: Equifax, Experian, and Trans Union. Each of these companies allow us to receive one free annual credit report. You are entitled to your free report under federal law. When you order your report expect to provide your name, address, social, and birth date. You can order over the Internet, by phone or even mail. The bureau should give true and accurate information on your credit report.

It will show past and present information from your providers, such as bill-paying history, accounts used, employment history, and loans. You may see both positive aspects to your report and what you need a little help on, to improve your credit score.

If you come upon something inaccurate in your credit report then you need to contact the bureau to correct it or delete it. You can send the bureau a dispute letter. Some negative information can stay on your credit report for as long as seven years. Employers would be able to see and possibly hold that information against you. It’s very important for you to keep your credit report accurate. Because there may be a small or even a large mistake, get a free credit report from each of the bureaus during the year.

Most likely if you have a good credit report then you are able to receive low interest loans. It’s better to apply for a low interest loan because then you are able to pay back the loan faster.

Having bad credit makes it harder for you to apply for various things. Car dealers, employers, and credit card dealers may want to see a copy of your credit report before they take the next step with you, trusting you and maybe investing in you. If they find that your credit report shows late payments in the past, or even no payments, they may not work with you and tell you to resolve the problem. Credit history keeps dates on credit card bills. It includes things like “Are you paying on time? Do you have any outstanding balances?”

You will also notice a credit summary on the report. Included is a graph with percents as the factor of your range of accounts. The report details which accounts are newest and oldest. It may show some negative accounts or it may not. Also, any public records or collections will show under your summary of credit.

Installment accounts show what you have agreed to pay. For example, a car loan will show the total amount of purchase, how long you have to pay it back, and the monthly payments including the year. If you are currently paying back a loan, you have an Open Account. Closed accounts are also very similar but are no longer active.

The bureau puts information in the same form, Open and Closed Accounts, for loans in revolving accounts. You may have open accounts such as Discover Card and Master Card. The graph makes it easier for you to understand the information. It also shows scheduled monthly payments.

Making detailed notes on how to improve your credit will better serve you in the long run. It is likely that you may have one mistake on your credit report so it’s worth checking out.

Inquires on your credit report may or may not impact your credit rating. Some things don’t have an impact on your credit rating and are only seen by you.

Negative accounts may show up on your credit report for as long as seven years for late payments or missed payments. As for collection accounts, it may turn ugly and the accounts may be turned over to a collection agency to collect the amount owed. That’s not all that may be on the bad side of a credit report. There are the public records where any employer or automotive dealer or bank can see. It lists information on bankruptcies, and a category of In Debt. Many people fall under that category but there are solutions and ways to get back on track to a better credit rating.

Avoid getting yourself into a trap of any negative status. Make sure you can make all of your payments on time and make sure you can afford your monthly payments.

You may also expect to see on your credit report much of your personal information. Creditors can fully identify you. They will view your full name, address and where you are currently employed. Lastly, the credit report insures us of our rights to a copy of our credit report and shows some rules. As for identity theft, if you are a victim of someone using your identity then you may file for “fraud alert” so that creditors will see you may be a potential victim.

Taking the time to read and learn more about credit reports has helped me to be better informed. Credit reports should not be taken lightly but should help us stay organized.

Stay out of debt!