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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.
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related forum discussion
My name is on the deed along with my daughter and her husband. I am not signed on the mortgage; however, this mortgage (which was in default) shows up on my credit report.
Should this mortgage be on my report since I am not on the mortgage but on the deed only? Tn. property.
Posted on: 27th Aug, 2010 06:11 am
Hi Jeannie!

Welcome to forums!

If you're not a coborrower of the mortgage, then your credit report shouldn't mention it. You should contact the credit bureaus and dispute the item and get it removed.

Sussane
Posted on: 27th Aug, 2010 11:03 pm
Here's the deal. Credit reports take time to learn how to read. I don't expect anyone to just pick one up never having seen one before and know what everything is.

"What are all these 1's next to my credit card accounts? Are they bad?"

"What does charge off mean?"

The free credit reporting sites are ran by the bureaus. They delete pertinent information you need to dispute negative items. Also you're only entitled to one of these per year. If you check your credit a lot it's going to look like you're constantly applying for credit and are going to be deemed at a higher risk, therefore lowering your score.

A credit report is a direct reflection of your credit worthiness including employment information, public records, addresses, credit you've been awarded and how you've paid.

Your credit score puts you into an underwriting category to help create a risk profile for you to either be extended credit or not be extended credit by a creditor.

Back in 2004 a US Public Interest Research Group study found that 79% of all credit reports have inaccurate information and 1 out of 4 is so damaging a person is denied credit. Given the events of the economy and market since then, these figures are much higher now. Credit effects every part of our financial lives as Americans. We help consumers assert their rights under very powerful consumer laws in the Fair Credit Reporting Act, Fair Debt Collection Practices Act, the Real Estate Settlement Procedures Act, and the Truth in Lending Act.

We do a lot of continuing education for mortgage and real estate professionals, so that way the end consumer does not get as confused and frustrated as they have been.

There's a lot of misinformation out there. There's probably a lot on your credit report as well. All I'm saying is you might want to seek the help of a professional and get a full credit report including scores and dates of last activity.
Posted on: 10th May, 2011 01:29 pm
The first thing lenders and banks look at are credit reports because these reports indicate how financially stable a person is. A credit report contains all of the information banks and lenders need to know. It contains not only your personal information but also your credit history. It reflects your financial behavior and how responsible you are regarding making timely payments. Furthermore, it also contains any complaint made against you that may be caused by unpaid bills or mortgages. Not only is checking credit reports important for lenders and banks, but it is also important for employers as they use these reports to assess their prospective employees.
Posted on: 21st Mar, 2013 04:52 am
A credit report contains all of your financial activities including credit history, timeliness of your payments, whether you pay partially or in full, your current debts, your account status, your current balances and your credit score. Your credit report will show how financially responsible you are and will be the basis of all creditors and lenders whenever you apply for new credit, take out loans, apply for mortgages, etc. Therefore, it is important that you are aware of your financial statements by checking your credit report, to ensure that you maintain a good credit score range.
Posted on: 31st Mar, 2013 10:09 pm
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