How to Review Your Credit Report
Review your credit report carefully when you receive it. Why?
* Discover and correct errors: Credit reporting errors can cause your applications for credit, employment, or housing to be denied unexpectedly and unfairly. If possible, order and review your credit reports at least six months in advance of applying for a major loan to allow enough time to dispute any errors that you might find, and give you time to prepare an explanation for any remaining inaccuracies to a potential creditor.
* Get a snapshot of how creditors see you: Lenders want to know how you’ll perform as a borrower. Once you’ve identified any weaknesses in your credit file, you can work to resolve them and improve your appeal as a borrower in the eyes of creditors.
* Become aware of identity theft in its early stages: Most people don’t know they’ve been a victim of identity theft for months or even years after their identity is initially stolen. I was fortunate to discover that my identity was stolen after only 2 months. The sooner you recognize and address identity theft, the sooner you can minimize any damage to your credit and your finances. I keep tabs on my identity (since it was stolen) by monitoring my credit.
What’s in a Credit Report?
Although each of the three credit reporting agencies uses a slightly different format, all credit reports contain the same four main types of information:
* Identifying data
* Credit history
* Credit inquiries
* Public information
The identifying information in your report comes primarily from your past credit and loan applications. This section will generally include the following data:
* Your full name, including any nicknames and suffixes (e.g., Jr., Sr., III) used to apply for credit
* Your spouse’s name, if you’re married
* Your Social Security number
* Your birth date
* Your current and previous addresses
* Your current and previous employers
The credit history is the most important section of your credit file. It lists every credit account opened in your name. Each listing contains the following information:
* Name of creditor and account number
* Type of account (revolving, installment, etc.)
* Date account was opened
* Payment history, including late or missed payments and collection referrals
* Credit limit or original loan amount
* Current balance due
* Date of last payment
* Date information was last reported
* Number of months information has been reported
* Authorized users, if any
Thursday, January 7, 2010
How to Review Your Credit Report
Wednesday, December 23, 2009
If you want to begin to repair your credit, requesting a copy of your credit report is the first step. How you can obtain a copy of your credit history and the benefits of doing so are explained in this article.
The most common reason people request a copy of their credit history is to assist with repairing their credit. Credit reports list entries which include a person's financial history, such as identifying information, accounts, and payment history. The review of a credit history will tell a person if all of their information has been recorded accurately or if there is false or inaccurate information which may be affecting their credit score.
If a person discovers inaccurate information on his report, he can dispute this information by sending a letter to the reporting bureaus requesting a revision or deletion of the information. If, within 30 days, the bureau cannot obtain verification of the disputed information, the bureau must remove the entry from your report. This will increase your credit score.
Credit reports are also helpful for finance and budgeting purposes. Obtaining your report allows you to view your status in one neat, concise report. A report can allow you to determine if you should work to consolidate your debt or assist with prioritization of payments.
Reviewing your history can also help protect you against identity theft by allowing you to compare all recent credit activity with your recollection of your personal credit transactions. Identity theft is a serious threat to a person's financial situation as well as their credit worthiness.
There are several ways to request a copy of your credit history. You can obtain a copy of your report from one of the many internet businesses which offer this service. Additionally, you can obtain a copy for free from the three major reporting agencies, Experian, Equifax, and TransUnion. These three major credit reporting agencies are legally obligated to provide you with a free copy of your report once every twelve months. You may obtain your free copy of your report by calling Annual Credit Report at (877) 322-8228.
It is wise to obtain a copy of your credit report. Request yours today and when it arrives, sit down and review it for any inaccuracies, so you can begin to rebuild your credit.
Tuesday, December 15, 2009
It is a wise decision to get a credit report from a credit reporting agency. Once you have your report, you must know how to read it. This will help you in understanding the information sent and judging your financial position from a lender's point of view.
It should be remembered that there are three main credit reporting agencies in the USA namely Equifax, Experian, and TransUnion. It is a requirement of the Federal Trade Commission that all three of these companies give a credit report to their clients free of cost once ever year, if asked for it. Remember that this report is sent to the lenders and credit card companies to check your record if you ask for a loan or credit card so knowing your credit score beforehand would be beneficial for you. It has been seen that credit reports contain fraud, identity theft and wrong information which makes the person ineligible for getting a loan, credit card etc.
It is quite easy to understand a free credit report. Here's how! The report consists of five basic points.
1. The particulars of the person such as name, social security number, phone number, etc.
2. Public Records Information, i.e. if you have any previous evidence of bankruptcy, civil judgments etc
3. The information about collection agency, which basically includes any debts that you were unable to pay.
4. Information about your credit cards, open accounts, utilty accounts, loans, leases etc.
5. The names of companies who have asked for your credit reports in the past.
Ensure that you have gone through all these points. Also, keep a check that your information is updated. Immediately report any wrong information to your credit agency because it takes a few weeks for your request is processed.
Tuesday, October 14, 2008
John R. Ulzheimer, the author of “You’re Nothing But a Number" and an expert on credit scores, answered reader questions on credit and the importance of creditworthiness.
Q. I deliberately keep my credit limit lower than what the credit card company will give me on the grounds that should I be hit by fraud, it won't rack up huge charges. Interestingly (no pun intended), a few Saturdays ago I went online to check my balance and discovered what turned out to be the first of several fraudulent charges that, coupled with my usual monthly balance, overshot the credit limit by 79 bucks or so. I do not know when the credit card company planned to notify me but a representative admitted that they should have caught the problem. And yes, I understand that I am not responsible for the fraudulent charges.
Is it a good idea to lower one's credit limit to a more reasonable amount? After reading your column on Oct 10., it sounds like it's not.
A. Ann, it is actually better to have as high a credit limit as possible on credit cards. As you learned through your own experience, you have basically no liability for fraudulent charges if you notify your lender as soon as possible. And the upside to the higher limit is twofold. First, you have access to capital should you need it, which is certainly a good thing these days. The second reason is that you will help to maintain a low "balance to limit" ratio on your credit cards, which is extremely important when maintaining strong credit scores. So if your credit card companies offer you higher limits then gladly take them. Just don't increase your balance or you'll negate any benefit to your scores.
Q. Can you give us guidelines for whether we can cancel a credit card without harming our credit score? I have four credit cards and one of them, my second oldest (since 2001), I don't use anymore. My combined balance is always under 10 percent of my total credit (usually on just one of the cards) and I always pay my balance in full during the grace period. Can I safely cancel the card I'm no longer using? Should I do so, and how?
A. It's almost never a good idea to cancel credit cards. In your case, the reason that your balance to limit ratio is 10 percent is because of that fourth card that you're thinking of canceling. Unless you pay down your balances even more, that 10 percent will increase and your scores will go down. Here's my personal credit card strategy: I have six credit cards with a combined credit limit of $121,000. This gives me enormous flexibility if any of my credit card issuers choose to do something nasty like lower my limits or close an account. It also ensures that my balance to limit ratios never get about a few percentage points because I use my cards modestly and pay them off at the end of the month. I use each of these cards at least once per quarter so none of my lenders close them due to inactivity. My lowest score FICO score is 809.
Q. Please address credit reports and scores for a married couple. Our primary credit card is in both of our names, but we might have other credit data in one name only. If we were to make a major purchase, such as a mortgage, it would be a joint purchase. I'm thinking along the lines of a joint tax return, if there is such a thing as a joint credit score? Is this an issue? Any specific advice for married couples?
A. Good one John. When two people get married at least one typically changes how they use credit. The problem is that credit reports and scores are maintained and generated at the individual level, not the joint or married level. You will always maintain your own credit reports and your own scores, as will your wife. When you apply for joint credit the lender can and normally pulls both your report and the joint borrower's report. Same with scores. And if the account is approved then it likely will show up on both of your reports and will affect both of your scores. This commingling of credit is a necessity especially when you need two incomes to qualify for a loan. But it becomes problematic if or when a couple divorces because the court can't override the original contract with the lender — even though it can assign payment responsibility to one ex-spouse or the other. Frankly, divorce attorneys would better serve their clients if they focused on not only dividing assets but also dividing liabilities at the contractual level.
Saturday, September 27, 2008
Here's one way to dodge credit card debt and late fees: Don't carry any plastic.
"People look at me like I'm an anomaly. But guess what? It's a whole lot easier when you're not juggling debt," said Paige LeFevre, a 41-year-old Atlanta resident.
The idea of living without credit cards is being given more consideration at a time when Americans hold more than $850 billion in credit card debt, four times as much as in 1990. Of course there are significant benefits that come with credit cards -- convenience being just one of many -- so be sure to weigh them carefully before rushing to close your accounts.
A key concern is the role credit cards play in building your credit and maintaining a credit history. Remember that building good credit is important if you're in the market for a mortgage or other type of loan. Prospective landlords or employers often run credit checks, too. So holding on to your credit cards may be in your best interest.
Credit cards also offer certain consumer protections; for instance, issuers will often refund charges for faulty products. Cards are also necessary to rent a car, and, if managed properly, can reap financial perks through rewards programs.
LeFevre says her vow of plastic abstinence came after she ran up $40,000 in debt while remodeling her home two years ago. But as a homeowner with a steady job for six years, LeFevre wasn't overly concerned about her credit score. She says she hasn't checked
her credit score in recent years, but figures it's better when she's not buried in debt.
"It's just too easy to use," said LeFevre, who works for a retirement investment advising company. She has paid off her debt with a number of drastic measures, including trading in her a car for a cheaper model, getting a roommate and selling many of her belongings. She also axed her cable package, manicures and eating out. She keeps her spending in check by taking out $200 in cash every week for groceries and gas.
For LeFevre and others, keeping plastic around simply leaves the door open for temptation. The reasons for credit card debt no doubt vary, however, and in many cases is the result of financial hardship.
According to the Consumer Federation of America, a nonprofit advocacy group, 58 percent of people with credit cards don't pay their balance in full every month. Those that carry a debt have an average balance of $17,103, according to the group.
It's no wonder Americans are easing up on credit card use. Last month, Mastercard Inc. and Visa Inc. reported credit card spending was growing at its most anemic pace ever.
So how can you cut back? One option is to simply leave your plastic at home for a few months at a time. A credit card only needs to be used about once every six months or so for the credit line on the account to count toward your FICO score, said Barry Paperno, a spokesman for Fair Isaac Corp., the company that created the FICO credit score.
Making small charges on your card once every few months may improve your score more than frequently running up big charges, said Paperno. That's because your credit utilization -- the percentage of your credit line that's in use -- makes up 30 percent of your score. So the smaller your outstanding balance in relation to your credit line, the better.
For the same reason, closing your credit cards could lower your score if you have outstanding debt. If you're still determined to rid yourself of plastic, try to whittle down your balance before doing so. Cancel one card at a time, and wait a few months in between each cancellation to lessen the impact on your score.
For New York City resident Kira Limer, 25, not using credit cards makes it easier to stick to her guiding financial principle: Don't spend money you don't have. It also makes it easier to keep a running tally in her head of how much she's got in the bank. She relies on a debit card for day-to-day expenses. "I just like to know for sure I'm not spending beyond my means," said Limer, a resource librarian at an architecture firm.
Friday, September 26, 2008
Charge offs stay on your credit report for 7 years from the date of last activity on the account all the while damaging your credit scores. That is such a long time for one mistake to affect your entire financial being. Just one charge off can prevent you from getting credit including; a decent car loan, credit cards, personal loans or can even stop you from qualifying for a mortgage! If you do qualify your interest rate will most likely be much higher costing you tens of thousands on the loan.
Understand that the reporting of items on your credit reports is completely voluntary. No law demands that all your accounts be reported to the credit bureaus. Creditors report at their will.
If you have the ability to pay the charged account do so. The credit might accept less than what is owed as a payoff "in full" meaning that the account is satisfied and closed. What I advise is to have the creditor either update the account to "paid as agreed" "never late" or remove the account in its entirety. Get it in writing if they agree to do so before you send any money as things tend to be forgotten once the creditor gets what they want (your money).
Some creditors will lie and tell you that once a trade line is reported as "charged off" then it must remain that way. This is simply not the case as creditors use software to update the credit bureaus. They can update their reporting at anytime and at their discretion. The simple fact is creditors remove charge offs from credit reports using this method all the time!
If your charge off is already in a paid status then perhaps the only effective way to remove it is to dispute the accuracy of the trade line with the credit bureaus. This is can get a little complicated. There are definite right ways and wrong ways to dispute. If you mess up you can almost guarantee that the charge off account will stay with you for the entire seven years. That is why I recommend hiring out the help. Credit repair is most certainly something you can do yourself...if you have plenty of time to research the dos and don'ts.
Tuesday, September 23, 2008
It is a given fact that when you are credit card holder greater possibilities of more credit debts coming in rather than being settled will usually take place. People from all over the world where credit card served as a major source of trade are facing with a lot of debts from credit cards. There are higher cases of foreclosures and even identity theft, these issues have become rampant at present, and still a lot of people are opting for an instant relief of having credit cards.
With all these factors, the need to obtain your credit report from time to time in keeping yourself updated is deemed necessary. A lot of options can be preferred as a means of getting it. You can easily have access to a free report once you have been declined of your credit card application. You will then be given all the right to obtain a free copy within 60 days duration of time. However, if you haven't taken any application, then obtaining a copy with a small fee is needed in order to get a good view of your credit information.
There are also a lot of ways in obtaining your personal copy and this can be in the form of free credit report once a year. You can call for your personal copy by means of writing to one of the three major credit reporting agencies. Also, to get a free report you will also need to put your information and personal data. This will entail in providing your full name, your address, social security number, date of birth, phone number among many others.
Another option that you can take is by getting your free report online. All you have to do is sign up for online affiliates catering to this kind of services. These services will enable you to acquire your online access and you can get directly to your own information on the net. Queries and access to information can be done at any time. This kind of option is ideal for those credit card holders who are considered as main targets of identity theft. This is also a very convenient way of logging into your personal information online that are easy to navigate and faster to operate. Remember that your account password is needed in this kind of service and this password should be something that is complicated yet easy for you to commit to memory.
Free credit report once a year can be your way of checking your credit standing and doing something to either maintain or make it better that will play a big role in your being credit worthy. There are a lot of ways on how you can obtain your credit information and checking it with careful and keen details is important in avoiding other problems that may occur in the future.
Obtaining your free credit report once a year is also a good way of managing your finances well and keeping up with the standards of the major credit bureause.