Credit Reports and Credit Reporting Agencies
We all know that our financial transactions are reported to credit agencies that track how well and how quickly we pay our debts and that when we apply for a loan for one reason or another, those agencies report our credit history to prospective lenders.
However, most of us don't know a great deal about how that actually happens and how our credit is rated.
The fact is that credit reporting has evolved to an industry all of its own.
Just a few short years ago, when someone applied for a loan, he or she put down credit references ? retail stores, banks, or other people or places with whom they had done business in the past.
As a matter of course, the lender checked the references and decided whether or not to grant a loan based on an amalgamation of the responses from them.
That really isn't the case any more.
Instead, there are three major agencies that track everyone's credit and provide a credit rating when contacted by a potential lender.
The three agencies are Equifax, located in Georgia; Experian, located in Texas; and Trans Union, located in Pennsylvania.
When someone applies for a loan, the lender generally contacts one of these three agencies and obtains a credit score and the score helps the lender decide whether or not to make a loan.
Credit Scores
How is a credit score calculated?
Until recently, that was one of life's great mysteries, but over the past few years new rules and regulations have made the information more readily available.
Your credit score is a number that ranges from 300 to 900, although the exact formula for determining that number is proprietary and is not released.
This is how it works in general.
? 35% of the score is based on the history of how you have (or have not) paid your bills.
The agencies track how many of your bills have been paid on time and how many haven't, as well as whether or not any of them have been referred for collection.
The more recently you have had a collection or failed to pay something on time, the worse your score will be.
? 30% of the score is based on the debts you have at the time of the rating.
It is includes car and home loans, credit card debt, retail store debt and the like.
If you have several credit cards and they are all limited out, your credit score is lower.
? 15% of the total score is based on how long you have had credit.
If you have never had credit or have only had credit for a short time, the lower your score will be.
? 10% of the score is based on the number of inquiries that have been received about your report, particularly if there are several in the past year.
? 10% of the score is based on your current credit and the types of credit you have.
The number of credit cards and loans you have, as well as the available credit you have on your credit cards and considered.
Because your credit score is based on these factors and they are constantly changing, your credit score changes along with them.
Therefore, there are things you can do to change your credit rating and bring it up.
Changing your Credit Rating
The first thing to do is get a copy of your credit report and make sure there aren't any mistakes on it.
If there are, take steps to get them corrected.
Errors in reporting do occur, although the credit bureaus would like for you to think they are foolproof.
Here are a few more tips to improving your credit rating.
? Don't pay off the entire balance on your credit card.
Keep about 75% of it paid and keep a 25% balance.
This applies to multiple credit cards as well.
? Don't get rid of your older accounts.
Keep them open.
The credit reporters look at the age of your accounts and the longer you have had a particular account in good standing, the better.
? Pay your bills on time.
Experts say that this is probably the most important factor of all.
? Prevent inquiries to your credit report whenever possible.
Your score drops with the number of inquiries.
The real key, however, is to only get credit when you need it and when you do get it, use it wisely.
You can damage your credit rating with just a few late pays or collections and it may take up to a year of paying everything on time to build up a better rating.
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What Makes up my Credit Report?
Many of us may not know our credit score, some may not even be aware of a credit score, that is until they attempt to apply for credit of some sort, be it a credit card, mortgage or apartment rental. To most, they view our credit score as a one dimensional number, nothing more, hence the reason it is so important for us to become more aware of what our credit score is. People see our credit score as an indication of who we are as people. Frankly, I don't feel that I should be judged for not having paid a bi during my college years, but unless we become proactive regarding our credit report, that is how it will be.
Let's consider the elements that make up our credit report and ultimately decided our credit score. The first factor is payment history.
Basically do you pay your bills on time. The second factor they look at is your outstanding debt. How much do you owe and to whom do you owe it?
The third factor is length of credit history. I feel this category is...
Credit report > What Makes up my Credit Report?
Consumer credit 101- What You Absolutely Need to Know
There are plenty of free credit reports offers on the Internet these days. Credit report is basically your financial resume, so make sure it is correct and protected from hackers or being theft. Your credit rating is what opens and closes these seemingly magical financial doors. The secret to your credit score is found in your credit report. Creditors use your credit report to find out whether, you are eligible or not for the great deals they are offering like "free credit reports" or "Great Low Rates on Approval!" etc.
Credit reports are not only used for lending money but it also helps in finance from bank and mortgage loans.What is consumer credit report?A consumer credit report is a document, which gives factual information of an individual's credit payment history. In other words it contains your personal and credit statements, reputation and your life style. It also tells whether you've been sued, arrested, or filed for bankruptcy. It doesn't tell only your social security...
Consumer credit 101- What You Absolutely Need to Know
Credit report > Consumer credit 101- What You Absolutely Need to Know
Your Credit Report, A little Improvement Can Go A Long Way.
You may think you have a marvelous credit report, be cautious of the mistake factor. Just as you receive mail with your name and address misspelled, your credit report can have errors just like anything else. Whether it is someone's typing over site, out of date info or even mistaken identity, errors go on more regularly than we all can imagine. According to the FTC, both the credit reporting agency and the establishment that provided the information to the credit reporting agency have duties for correcting wrong or incomplete information in your credit report. While checking your credit report, if you locate incorrect information on your credit report, without hesitation notify the CRA in writing directly: 1.
Tell the Credit reporting agency what information you believe is incorrect on your credit file. Send copies, never originals of documents that support your position. 2. Be sure to providing your entire name and address, your letter should clearly describe each entry in your...
Your Credit Report, A little Improvement Can Go A Long Way.
Credit report > Your Credit Report, A little Improvement Can Go A Long Way.
Big Brother knows what's in Your Credit Report. How about You?
Whether you are aware of it or not, credit bureaus have been keeping tabs on you and how you use credit. When it's time for you to apply for a mortgage, credit card, or personal loan, your credit report is what lenders look at to decide to approve you or not. Information about you is collected and stored in national repositories. Every time you apply for credit, whether it's a retail store charge account or an auto loan, the information you provide gets sent to the credit bureaus. When you are late paying a loan, it shows up on your report.
If you have ever been in a dispute with a merchant and you refused to pay them, the merchant can report your non-payment to the credit bureaus for all lenders to see.Your credit history is an important part of getting a loan. By getting a glimpse of how you handled debt obligations in the past, lenders can estimate the likelihood that you will pay back their loan in the future. What's in your credit report?Credit reports are chock full of goodies...
Big Brother knows what's in Your Credit Report. How about You?
Credit report > Big Brother knows what's in Your Credit Report. How about You?
Credit Report Concerns at Top of List For Consumers Seeking Refinance Mortgage Rates and Debt Consolidation Loans
Dallas, TX
October 27, 2004 -? Americans are overwhelmingly rushing to financial industry experts for advice on credit reports, as they refinance their mortgages and consolidate debt for the Christmas shopping season. SPENDonLIFE.com, a savings portal for consumers, reports that 3 out of every 5 consumers seeking advice from the Ask The Expert service are having problems with their credit report. "Consumers are planning their finances in preparation for the Christmas shopping season. Many of them are finding errors on their credit report and realizing it is costing them money each month," says Mark Henry, SPENDonLIFE.com President. "Our experts are enthusiastic about getting these consumers back on track.
They empower...
Credit Report Concerns at Top of List For Consumers Seeking Refinance Mortgage Rates and Debt Consolidation Loans
Credit report > Credit Report Concerns at Top of List For Consumers Seeking Refinance Mortgage Rates and Debt Consolidation Loans
Credit Reporting Bureaus
The key objective of Credit reporting bureaus is to prepare your credit reports. They collect information on your credit status from credit card companies, banks and mortgage companies. Whenever creditors want to verify your credit worthiness, they check out your credit reports. On the basis of your credit report, they decide whether they should lend you money or not. The three major credit reporting bureaus in the United States are Equifax, Experian and TransUnion.
But all the three credit reporting bureaus do not necessarily reflect the same credit status. There is bound to be some disparity among the credit reports.
Credit reports matter when it comes to borrowing money from lenders. A healthy credit report will definitely create favorable impressions among the lenders. If you have handled you credit carefully, your credit report will surely reflect your creditworthiness more prominently. Thanks to a strong credit report, you will get credit whenever you need....
Credit report > Credit Reporting Bureaus
Credit report
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