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Credit report: How it affects your creditworthiness?

Posted on: 12th Apr, 2004 05:28 am
a credit report is an account of your payment history. it records how you have dealt with your credit-card accounts or loans, and how regularly you pay off your bills. it also shows whether any action has been taken against you because of unpaid bills. the information regarding your past and present payments is forwarded by your creditors, lenders, insurers and even employers to the consumer credit reporting agencies. based on this record, these agencies prepare your credit report.

types of information included in your credit report

a credit report usually includes four types of information:
  • personal information:
    this includes your name, any known aliases, present and previous residential addresses, year of birth, social security number, current and past places of employment.

  • credit information:
    credit information is about the number of credit accounts that are in your name or that list you as an authorized user with banks, credit-card issuers, retailers, utility companies, and other lenders. your account details, supplied by the creditors to the credit reporting agencies will include

    1. name of the credit reporting institution.
    2. account number related with the account.
    3. terms of repayment.
    4. type of account
    5. date on which the account was opened.
    6. high credit
    7. credit limit or loan amount
    8. current balance
    9. timeliness of payments
    10. account status
    11. past due
    12. date reported

  • public record information:
    events that are a matter of public record, such as whether you have ever gone through bankruptcies, foreclosures, monetary judgments, or tax liens, may appear in your report.

  • recent inquiries:
    these inquiries include a list of everyone who has accessed your credit report within the past two years.
based on the above mentioned information on your report, the credit reporting agencies assign you a numerical quantity known as credit score.

how to get your credit report

according to the free file disclosure rule of the fair and accurate credit transactions act (fact act), it is mandatory for each of the nationwide consumer reporting companies (crc) - experian, equifax, and transunion, to provide the consumers with a free copy of their credit report once in every 12 months. while making a request for credit reports, the consumer has to give his or her name, address, date of birth and social security number. the consumers may also have to provide information regarding their finances- for instance the amount for their monthly mortgage or car payment. this is to protect the security of their credit information. though consumers can get their free reports once in every 12 months, but if they want to check their reports in the meantime, they can always purchase them from the credit bureaus.

common errors that you may find in your credit report

once you have ordered and received your report, review carefully whether the report contains any inaccurate information or not. some of the errors that your report may include are:
  • misspellings or numerical errors in birthdates or addresses
  • outdated information
  • information related to a stranger
  • the same loan listed more than once
  • information related to the credit accounts that are closed by you but are listed as open.
  • no information regarding your major credit, mortgage, or other accounts that speaks of your creditworthiness.

always remember that serious errors on your report can have an effect on your ability to get a loan, insurance or even a job. therefore, you should dispute such errors with the reporting agencies.

correcting errors on your report

federal law allows consumers to challenge inaccurate information in their credit reports. if your report contains incorrect or outdated information, then you can contact the reporting bureau in writing or over the phone and make your claim. you can also report errors through the websites run by the credit reporting agencies.

a good credit report plays an important role in maintaining a happy and healthy financial life. so, gear up and start working on improving your credit report as it is one of the important factors that lenders will consider while determining your creditworthiness.
related articles

related forum discussion
how will i read my credit report?
Posted on: 28th Jul, 2005 08:26 pm
Hi Sarah.J
Welcome to MortgageFit forum.

A credit report carries information divided into four sections like identifying information, credit history, public records and inquiries. The first section consists of your name, Social Security number, current and previous address, date of birth, telephone numbers, your employer, spouse's name and any other personal information.

The next section deals with your credit history. It consists of information as to how much you owe as debt, what kind of credit you have taken, status of the account, how well you have managed to pay off the debt etc. Most credit reports display payment codes ranging from 1 to 9. An R1 or I1 on a report implies a good payment history on a revolving or installment account.

The third section carries financial data such as bankruptcy, judgments, and tax liens etc. The last section deals with inquiry. There are codes that are used in this section. For example Equifax provides credit reports which have code like PRM. This implies that your name and address is given to a creditor and you may have been pre-approved for a loan. There can be codes like AM or AR which implies that one of your creditors has examined your file to see whether your financial condition has changed.

Hope you will find this information useful.

Please feel free to send further queries.

Regards,
Jessica.
Posted on: 29th Jul, 2005 12:39 am
Hi guys,

Got to learn a lot about credit report. But tell me is it really necessary to check it at regular intervals?
Posted on: 04th Nov, 2005 01:14 am
Hi James,

I would suggest that you check your credit report at regular intervals. This will help you against fraud cases, especially identitiy fraud, which is quite common nowadays.

Read through "Ensure a clean credit report" and "Is checking the credit report chargeable?"to know more on credit report checking.

Regards,
Jessica.
Posted on: 04th Nov, 2005 01:32 am
James,

I agree with Jessica, identity theft is so rampant now and there are so many cases out there.
You should monitor your credit, a good place to do that is from myfico.com or even privacy guard. They charge a minimal fee and what is good about them is if there are any changes that are made to your credit report they will notify you normally via e-mail. So this gives you the opportunity to dispute it quickly.
Your credit score can be affected by the wrong spelling of your name or different addresses. It pays to constantly monitor your credit.

---------------------------
Cliff and Sandra
Posted on: 04th Nov, 2005 05:18 pm
i have a list of good sites to get a free credit report. "http://freecreditreport.lendgo.com". just keep in mind that all these so called free sites are not really fee..they charge $7-10 monthly. but the nice thing about the list on my site is that each will give you a 30 day trial... you can signup, get your report, cancel within a month and pay zero.


but in my opinion....you should pay the $10 a month. the very fact that each one of the service have credit monitoring where they email you of changes is worth it's weight in gold. trust me...just from personal experience, i am very glad i have signed up with these service. i use citibank credit monitoring and i am very happy with them.

the myfico.com site send me hords of junk mail to refinance. agggghh!

cheers

[deactivated the link - as per forum rules. thanks]

------------------------------------------------------------------------------------
"www.lendgo.com" - mortgage refinance with the lowest rate
"http://creditcard.lendgo.com/"
Posted on: 30th Nov, 2005 05:40 pm
Do bank accounts (both active and closed) show up on credit reports?
Posted on: 01st Jun, 2006 11:45 am
Bank account information as well as your credit accounts are reflected in your credit reports.
Posted on: 01st Jun, 2006 12:04 pm
Hi JJ,

Welcome to MortgageFit Forums.

Your credit report contains information on your bank accounts, loans, credit card accounts, financing etc.

You can monitor your credit report and can find out any possible identity thefts from it.

God bless you.

For MortgageFit,
Samantha
Posted on: 01st Jun, 2006 12:17 pm
When companies pull credit checks, does that "check" actually affect your score?
Posted on: 14th Apr, 2009 12:39 pm
Hello all,

I can't believe that I haven't seen www.annualcreditreport.com anywhere on these posts. Please everyone understand that you don't have to pay anything or sign up for services that you have to cancel in an allotted period of time just to see your free credit reports. Most of these sites are just out to trick consumers into signing up for there services. Why do most of them have the word "free" in the name and yet you still have to pay something. I'll give everyone a free $5 dollar bill if you first pay me $10!!! Ha HA.

Seriously though, if you want nothing but your free credit reports then visit annualcreditreport.com. It was created by the three major credit bureaus and is the only website you should use to obtain them. You can receive your credit score every time you apply for a loan and request a copy of the credit report they used to determine the decission of your application. Also anytime you dispute innacurate information on your credit reports you can request a revised, corrected copy of it from the credit bureaus. There are a lot of ways to view and monitor your credit without having to pay someone to do it for you.
Posted on: 14th Apr, 2009 05:26 pm
I laugh when everybody talks about getting a free credit report.

What good is it if the person doesn't know how to use it to help themselves?

Most people won't take the time to read and learn what to do with their report.
Posted on: 18th Sep, 2009 08:26 am
you're right rolando. but i'm glad you got a laugh about it - it's good to laugh.
Posted on: 18th Sep, 2009 12:00 pm
At the very least it provides a starting ground.

If you get a credit report which looks bad, sure 8/10 people will just bin it and shrug their shoulders, butt he other 2 will actually read it, puzzle over it and try to figure it.

From such humble beginings the seeds of financial literacy are planted. More info = less ignorance = fewer mistakes, at least thats the theory!
Posted on: 21st Oct, 2009 03:50 pm
credit score is only one part of the puzzle, but it is a good place to start I guess.
Posted on: 21st Oct, 2009 07:01 pm
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