Liz Roberts asked:


When applying for credit or taking out a loan, the first thing that your creditor will do is to check your credit report. Based on your credit report, a lender can either grant you an approval or reject your application. For this reason, everyone is advised to personally check on their credit report first before sending out an application to a prospective lender. This way, rejection and unnecessary inquiries in your credit report can be avoided.

What factors affect the status of your credit report? Your credit report is divided into four sections- the identity information, credit history, public records and inquiries. Checking the accuracy of the details in your ID information section is important. One minor error can cause serious problems or mistaken identity.

Meanwhile, your credit history section is what your lenders is most interested about. The types of accounts you own, your debts, your payments, credit limit, and everything that concerns you and your creditors are listed here. Naturally, you’ll want to check if all the charges that are billed in your account are correct and if all the payments you’ve submitted to your lender are recorded accordingly.

The next part of your credit report is the Public Records section. You’ll want this section to be empty unless you’ve filed for bankruptcy once or if you have tax liens or have been through foreclosure. Obviously, a remark listed in this section of your credit report will have a negative impact on your status and your credit score.

Last but not the least, the inquiries section of your credit report contains information about past and present lenders who have made an inquiry in your report. If you frequently submit applications to various lenders and often get rejected, this will all be reflected in your credit report. Take note that too many inquiries and rejections will badly affect your credit score.

Now that you know the factors that make up your credit report, take the time to review every detail in your report. In case you’ve errors, you are free to dispute about them by sending a dispute letter to the credit bureau who issued your report and to your creditor as well. Remember, being aware about the status of your credit report is your personal obligation and is the best way to protect yourself from erroneous reporting and fraud.

What if you found out that your credit score isn’t enough to get an approval from a lender? Do not lose hope. You can still work out on improving your credit score by paying your unpaid debts and keeping up with your payments to your present creditors. By being timely in submitting your payments, significantly reducing the amount owed, and staying within your credit limit, you can be assured that your credit score will improve. So instead of rushing in submitting your credit card or your loan application, take a moment to review your credit report and see if you are in the right position to apply for new credit.



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John Mcfadden asked:


You might not realize but finding out the best way to read your credit report can actually save you a lot of time and money - it’s not even that hard to get started, but there are some basics that you need to get your head around all the numbers, abbreviations and unfamiliar terms before reading your credit report.

Before going to a website and getting your credit report you need to be aware that you will need to get more then one create report.

The three main credit report agencies will have a copy of your report but your information will be inconsistent across all three of them - lenders will report your information to maybe only one or two agencies and that information might be incorrect.

Your personal information is no doubt old and out of date as when past lenders reported on your personal information they will only normally report it back to one of the agencies.

You need to get a copy from each one and make sure you do this regularly through out the year, it is recommended that you get a copy from all three first and then get one copy every 4 months - but get one at a time - only by getting your report through this process can you be sure you have the correct information.

The main resign for this is that its voluntary reporting process so the lenders don’ have to by law report your information.

You need to make sure you get a consumer friendly report - don’t ask your friend who may work at a bank to get your copy for you - as you will not be able to read it correctly - you need to get a consumer version.

The Credit report layout

Each report is divided into four sections falling under these categories - Identifying Information, Credit History, Public Records and Inquires.

Identifying information is quote obvious - it’;s all the key information about you but make sure you look t this closely - this is the most common place for your report to be incorrect, especially check you social security number.

Other personal information is your address, phone numbers, date of birth, drivers licenses, your employment information and your spouses name.

The following section is your Credit History - this is the most important information that your new lender will look at to assess your credit worthiness required to make an assessment. You might see that individual accounts are called trade lines.

The accounts will include each creditors name and the associated account number (this could be disguised for security reasons) Note that you may have multiple account kinds with the one lender as they will create a new one if you move.

Here you will have information like the date you opened your account, total amount of the loan, if you’ve paid off the account well and one time. It will also state how much money you owe and the credit limit, and ofcause the account status.

Look out for “charge Off.’s these are big black marks that mean that the lender has given up chasing you and has noted that they did not receive the money they were owed.

Public Recored

You wan this section left totally pristine white - blank as can be. As having a report here will seriously impact your likelihood of gaining credit. bankruptcies, judgments and tax liens activities are listed here.

Inquiries - The Last Section

This the place that will note each inquiry that was made you your account - noted as a soft or hard “call”so if you If you call the credit bureau and ask for a copy it will be on there. It’s great as it’s a very detailed entry record.

“Hard” inquiries are ones you initiate by filling out a credit application - you wan to avoid these as they will have a negative impact on your report if you have too many but the good news is that it also counts two or more “hard” inquiries in the same 14-day period as just one inquiry.

Read your report carefully and report any mistakes to each credit agency so you can get them all fixed and consistent as soon as possible.

I hope you know how to read your Credit Report, so you have a good handle on what your information means.



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