Understanding Your Credit
What Does Your Credit Report Say About You?
Surprisingly, many borrowers have never reviewed their credit reports! Being uncertain about what your credit report says about your circumstances may cost you extra when applying for a mortgage. Even those who pay their bills on time may have unresolved credit issues that hurt their score!
It is quite typical for erroneous information to be recorded on your credit report.
That’s why it’s critical for you to discover and remedy any concerns before applying for a loan.
Many of you may have seen ads for "Free Services" on TV, the Internet, and the Radio. When you encounter an offer that says a "Free Credit Report," it isn’t! Usually, it provides you with a little information just to entice you to sign up for their offers! However, you have the right under federal law to get access to a Credit Report that’s free and secure at
www.annualcreditreport.com. The major three credit reporting companies—Equifax, Experian, and TransUnion, are mandated by law to provide a free annual credit report at least once a year.
WHAT YOU NEED TO KNOW ABOUT CREDIT REPORTS
Do you know what's your Credit Score?
Your credit report is a numerical reflection of your ability to repay debts. Each bureau will assign you a credit score based on the information they have.
WHAT IS BEING REPORTED?
These are the items included on the credit report
Credit Cards
- Airline cards
- Bank cards
- Department store cards
- Gas cards
Installment Loans
- Auto loans
- Bankruptcies
- Collections or judgements
- Mortgage loans
- Rent (sometimes)
- Student loans
- Utilities
WHAT DOES YOUR HISTORY LOOK LIKE?
A credit history records the "health" of every reported credit line. Then, your credit score is calculated using the information in the table below. Account Variety indicates that you have a wide range of account types, installments, mortgages, revolving, etc. New credit can appear as a result of job screening, insurance-related inquiries, utility providers, and other credit inquiries.
ACTIVELY IMPROVE YOUR CREDIT!
If you’re having issues with your credit, this will not haunt you forever as long as you continue to improve your score. Lenders understand that "life-events" like accidents, divorce, job loss, and sickness occur. The objective is for you to show your lender that you used credit responsibly prior to the life-event and re-established your credit standing after the life-event. As new information is added to your report, the old information becomes obsolete. As you adjust your credit habits, your credit score will progressively improve.
The older your credit line is, the lesser
it impacts your score.
FIXING CREDIT REPORT PROBLEMS
When your credit report shows incorrect information, such as late payments even when you have paid on time or active accounts that have been closed, these can always be fixed. Identifying these issues is key for you to work on having them resolved. In order for you to take action, calling these bureaus would be the first step.
