How Well Do You Know Your Credit Report

Consumers are advised to order a copy of their report from the three major credit bureaus at least once a year to make sure that the information in their report are accurate and free from errors. How well do you know your personal credit report? On this post, let us talk about the information you can find in your credit reports and how it affects your credit score.

You’re Report and the Three Credit Bureaus

There are three major credit reporting in the United States: Experian, TransUnion and Equifax. Each company does its own separate reporting so it is important to order a copy of your report from each one.

Consumers are entitled to one free copy from each credit bureau annually. To request your free annual credit report, visit www.annualcreditreport.com – the only authorized resource of free consumer credit reports. You may also call (877) 322-8228 or you may complete the form from the Annual Credit Report Request brochure, and send it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA, 30348-5281. You can order all your three reports at one time or order one report at different intervals throughout the year.

What Your Credit Report Contains

Your credit report contains personal information as your full name; Social Security Number; Driver’s License number; past and present residence; and employment history.

You can also view from your report all your credit activities with creditors that report to the credit bureau. This includes payment history, debt and other account information. Activities involving your credit card accounts, mortgage loan, auto loans and other personal loans are all reflected in your report.

Inquiries made by companies to whom you have submitted application to are also recorded in your report. This is why a creditor will be able to see if you have submitted application to other lenders and why consumers are discouraged from submitting multiple applications at the same time.

The last section is the Public records section. This section is supposed to be empty unless you have a record of bankruptcy, foreclosure, tax liens and other court judgments.

Your Credit Report and FICO Score

The FICO scoring system is a widely accepted model used to calculate a person’s credit worthiness. It is based upon five factors which are payment history (35%), credit utilization (30%), length of credit history (15%), types of credit (10%), and credit inquiries (10%). Based upon the FICO scoring system, it is easy to see why timely payment is very important in building good credit history and maintaining an excellent credit standing.

How you use your credit limit is another important factor. According to financial advisors, credit cardholders should be careful not to exceed 30% of their credit line if they want to keep an excellent score. If you are prone to maximizing or exceeding your credit limit, your credit score can significantly drop.

Understanding how your score is calculated can be a great motivation especially for people who must work on credit improvement. When you know the factors that influence your credit rating, it will be easier to plan your strategy on how you will manage your accounts and finances.  

 

About the Author:

Suzy Vanstrusen is a credit analyst and a writer on the website EZCreditRepairSolutions.com. She has been providing consumers with tips and wise information about credit repair as well as helping you out more with your bad credit loans.  Copyright © 2011

 

 

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