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[G201]Get Your Credit Report

by Brad Stroh, Bra

It is very important to get your credit report and analysis. Why is this important? For one thing, if you're thinking about buying a house or applying for credit for any other big purchase, you'll need a clean credit report, and it's always best to get your credit report and analysis before your lender does. This will give you an opportunity to clean up any discrepancies or errors, which are fairly common, and which can throw a monkey wrench in the works if not resolved.

Ideally, you should get your credit report and analysis once a year with each of the three credit bureaus:

• Bills can get them all –

• Equifax – (800) 685-1111,

• Trans Union – (800) 888-4213, ; and

• Experian (888) 397-3742,

You're entitled by law to get your credit report and analysis for free from each of these three credit bureaus once a year. You can get all three at once or spread them out over the year. If you get your credit report and analysis more frequently than that, each report will cost no more than around $10 and in some states considerably less.

If you've been turned down for credit in the last 60 days because of something a lender saw on your credit report, you can get your credit report and analysis free of charge. Lenders are required by law to notify you of this right if they deny you credit.

When you get your credit report and analysis, review them carefully to make sure all the loans and credit accounts listed really belong to you, and that all the accounts listed as open are actually current loans or balances. If a loan you've paid off or a credit card that was cancelled is still listed as open, contact the credit bureau and ask for your credit report to be corrected.

What Is the Range of Possible FICO Credit Scores and What Do They Mean?

FICO credit scores range between 300 and 850. Ratings are as follows:

~ Excellent: Over 750
~ Very Good: 720 or more
~ Acceptable: 660 to 720
~ Uncertain: 620 to 660
~ Risky: less than 620

How Is My FICO Credit Score Calculated?

The formula used to calculate your FICO credit score includes information based on several factors:

~ 35% on your payment history
~ 30% on the amount you currently owe lenders
~ 15% on the length of your credit history
~ 10% on the number of new credit accounts you've opened or applied for (fewer is better)
~ 10% on the mix of credit accounts you have (mortgages, credit cards, installment loans, etc.)

In general, when people talk about “your credit score,” they’re talking about your current FICO score. But in fact there are three different FICO scores developed by Fair Isaac—one at each of the three main US credit reporting agencies. And these scores have different names.

WILL YOUR SCORES BE DIFFERENT?

FICO credit scores range from about 300 to 850. It’s important to get your credit report and analysis so you can understand what your FICO score is. Fair Isaac makes the scores as consistent as possible between the three credit reporting agencies. If your information were exactly identical at all three credit reporting agencies, your scores from all three would be within a few points of each other. But here’s why your FICO scores may in fact be different at the three credit reporting agencies. The way lenders and other businesses report information to the credit reporting agencies sometimes results in different information being in your credit report at the three agencies. The agencies may also report the same information in different ways. Even small differences in the information at the three credit reporting agencies can affect your scores. Since lenders may review your score and credit report from any of the three credit reporting agencies, it’s a good idea to check your credit report from all three and make sure they’re all right.

Usually when you get your credit report and analysis from the credit bureau it will include a form for reporting any inaccuracies. Give as much detail as possible, and if you have documents that back up your claim, provide copies. By law, the credit bureau must investigate your credit report claim, but even if they decide your credit report is accurate as it stands, you should continue to try to correct the report by writing a letter explaining your side of the story (not to exceed 100 words), which the bureau is required to provide to anyone requesting your credit report.

When deciding whether to approve credit, lenders take the following into consideration:

• Your payment history--do you pay bills on time?

• Have you had a bill referred to a collection agency?

• Have you ever declared bankruptcy?

• How much debt do you have outstanding compared to your credit limits? The closer your debt is to your credit limit, the less favorable.

• How long is your credit history? If you haven't had much of a credit history yet, prompt payments are even more important.

• Have you applied for more credit lately? Too many applications for credit has a negative impact on your chances for approval.

• How many credit accounts do you have? Too many is considered a negative.

Information is retained in your credit report for up to seven to ten years. When you get your credit report and analysis, if you have negative items in your history, you can gradually repair your credit by consistently paying your bills on time from now on, paying down your balances, and not taking on any new debt. Lenders will take your improved record into consideration when deciding whether to approve credit, especially if you've been paying on time for at least a year.

Probably everyone knows that there are three major credit bureaus in the US, which are Experian, Trans Union, and Equifax. People know these three credit bureaus gather information about you on a regular basis from all your accounts, paid and unpaid, and just about any financial obligation you have. But unfortunately, that is pretty much where the knowledge of the vast majority of consumers ends.

As just as unfortunate, there is MUCH more to the story. In fact, there is actually a DARK side to the story, which is something that most people don't know about, and does not get resolved automatically. The only way to resolve the problem is for YOU to take action to get it resolved.

The secret is that your credit report contains errors, almost guaranteed. There are probably accounts listed there that you closed years ago that are still showing an outstanding unpaid balance. There may be accounts on your credit report that do not even belong to you, but someone with a similar name in a different city, or perhaps someone that has a social security number that is just a couple of digits off from yours, where the error was made during manual data entry. You may have accounts listed there that are showing you as consistently late with your payments, where you know for a fact that you have made each and every payment promptly since the beginning of time.

There is yet another secret also ? the three credit bureaus almost certainly have three very different pictures of who you are and your financial information. They do not share information amongst themselves. Some of your creditors may only report to one of them, some may report to two of them, some (like your mortgage company) may report to all three of them every month. And some of your creditors who reported to one of them last year are now reporting to a different one this year.

What this all adds up to mean is two things. First, not one of the credit bureaus has an accurate or completely correct version of you to be able to accurately and fairly assign you with a credit score or credit rating. Secondly, with a credit score lower than what you really deserve, you may be treated like a second class citizen the next time you apply for credit, whether at a department store, or for a new car, or for that new mortgage, where the end result is that you may not get approved at all, or if you do, the interest rate they will charge you will be astronomical.

The sad and scary thing about all of this is that it happens every day, it is happening right now as you are reading this, and worst of all, there is something you can do about it.

There are multiple things you can do to get your credit report corrected, and it is something that you need to start on, right now, and make it a regular part of what you do every month. It does not happen overnight, but you need to get the wheels rolling in your favor.

Take action now to get your credit report corrected so that your credit score and the credit rating you are assigned is a true reflection of who you are, which in the long run, can save you hundreds and even thousands of dollars.

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About Author

Both Brad Stroh & Jon A are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Brad Stroh has sinced written about articles on various topics from Auto Insurance, Bad Credit Home and Finances. Brad Stroh is currently co-CEO of Freedom Financial Network and . If you would like more of Brad's. Brad Stroh's top article generates over 33100 views. to your Favourites.

Jon A has sinced written about articles on various topics from Home, Sports Car and Acid Reflux. Jon is a computer engineer who maintains web sites on a variety of topics based on his knowledge and experience. You can read more about your credit score and your credit rating at his web site at. Jon A's top article generates over 40500 views. to your Favourites.