What is a credit report? A credit report lists your credit history, as well as information on your residence history (where you've lived), buying history (your bills and how you pay), judgments against you (have you been sued, imprisoned, arrested for financial reasons) and whether you've been bankrupt or not. All financial details are in this report.
How important it is? A credit report determines whether a financial firm (a bank, credit card company etc) will process or grant whatever it is that you requested. A credit report is unbiased ? it will just list details but it will never make a judgment whether it's ?bad? or ?good?
A Bad Credit report is usually deemed ?bad? because:
you have an outstanding debt
you've declared bankruptcy once in your life
you've been imprisoned for a while
you don't have enough assets
Pertinent information your credit report holds:
ID Information- Who are you? This section includes your full name, nicknames, aliases you go by, current address (as well as previous addresses), your social security number, birthday, employers (both current and previous), and civil status. May also include information about your spouse.
Credit Information ? How many credit cards do you have? All financial accounts you have with financial firms including but not limited to banks, credit card companies, and lenders (whether it be a mortgage, student loan, recurring loan). This section includes when and where you opened the account, credit limit, and for loans, includes amount of the loan, co-signers, and payment behavior.
Public Record Information ? have you ever declared bankruptcy? This section includes declared bankruptcies, monetary judgments, and ?everything financial? that is made public or declared.
Recent Inquiries ? who has been reading your credit report? This section lists down all inquiries made over the past two years.
Who makes the credit report. Consumer Reporting Agency (CRA) or a credit bureau collects the information and charges a fee every time an inquiry is made. Needless to say, whether you're applying for a loan, credit card or a free merchant account, you'll be needing a credit report. Here are some tips to make your credit report look dashing:
Get a copy of your credit report every two years (every year if you prefer) so you can assure all information is correct and recent, as well as note all inaccuracies and take immediate actions. This also secures you against identity theft.
Late payments of your bills can cramp your credit report. Pay all bills on time because your payment history will show up on your credit report.
Did you know that when you declare bankruptcy, it stays on your credit report for 10 years!? So as much as possible, AVOID at all costs. Pun intended.
Longevity in anything ? a home and job - shows sign of steadiness which lenders look forward to seeing in your credit report. House hopping is perceived negatively.
Businessmen who apply for merchant accounts are free from rejection when a credit report is adjudged as good and worthy. Although not all merchant account providers ask for it, high risk merchants need a good report for credit worthiness.
Don't take more debt than you can handle.
Maintaining a good credit report is difficult, but with discipline, a bit of scrimping, and common sense all be worth it in the end when you finally get that loan, or that card, or that merchant account free of any hassles.
Have you ever seen your credit report? Your employer probably saw it before hiring you. The landlord likely considered it before accepting you as a tenant. And long distance telephone carriers even look at it before giving you a long distance line. And youve never even seen your own credit report? If your answer in no, youre not alone. In fact, according to a recent study, less than 20% of all Americans have ever seen their credit report. Most people become concerned about their credit report only when they are denied credit. By that time, its usually too late.
You should take a look at your credit report at least once every 2 years. This way, information is still accessible and verifiable in the case that you may need to have it corrected. You should also look at your credit report before applying for any credit. This may help to avoid any unwelcome surprises.Allowing you to look at exactly what your loan manager will look at, can prepare you for any questions
If youve never had credit problems, you might think that you need not be concerned. But according to a recent government study, one out of every four credit reports contain errors, one out of every six contain errors that could cause denial of credit. Sometimes Credit reports are accidentally combined, and people with similar names or social security numbers actually share a credit report! Its not at all uncommon for family members to have overlapping data. Nor is it uncommon for a credit card or loan company to accidentally list you as having missed a payment.
Have you ever received a late notice or collection letter on something that you already have paid? Im sure you made a phone call or two and straightened it out immediately. But what about the monthly report to the credit bureau? You cant help but wonder if the mistake got corrected on that report. The only way to find out what is actually on your credit report is to look at it for yourself. When you do, you may be surprised to see that your credit record looks quit different than you expected. The past and present credit accounts that you expected to see, may not be listed, and still other accounts that you did not expect to see might be listed.
This is not at all uncommon because creditors are not required to report our account to a credit bureau. They are free to report only the information that they see fit. And they can report that information to whichever credit bureau they prefer. Some creditors report all credit account transactions to all of the large credit bureaus. Some creditors prefer to report an account only when it becomes delinquent. And still other creditors do not report to a credit bureau at all.This situation may provide for a pleasant surprise, if a past loan that became delinquent doesnt show up on your report. It may also provide a very unpleasant surprise, if something you thought unimportant was reported. Like maybe a non paid magazine subscription, or even worse, someone elses delinquent account record. The only way to find out what is on your report is to see a copy for yourself!
If you have bad marks on your credit report because of some past credit difficulties, Im sure youre wondering about credit repair. The advertisements tell you its possible, the banks and credit bureaus tell you its not! Yes, it is possible to remove bad marks from your credit report even though the information is true. Yes, legally! However, beware of credit repair clinics and agencies that make exaggerated claims and charge exorbitant prices.
Where to go for help.
Consumer Credit Counseling Service. A Non-Profit organization offering free or low cost financial counseling to help solve your financial problems. Services include, budget counseling, debt consolidation, and dealing with creditors. Over 600 offices nation wide. For the office near you call 1(800)388-2227
Debtors Anonymous A self help organization based on the same basic principles as Alcoholics Anonymous. For the phone number of your local chapter, call (212)297-6102
QUESTIONS AND ANSWERS
What does it mean to have good or bad credit?
Having good credit means that according to your past creditors, your record (credit report) is clean. You made payments, and paid off your past debts satisfactorily. Having bad credit is just the opposite. Your record (credit report) shows that you have not paid off your past debts as agreed. This could mean late payments, collections, non-pays etc. This information is held at the
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