4 important factors about your credit report

If you want to be successful financially, your credit report can be one of the most important tools in your arsenal. A good credit report opens doors to opportunities others do not have, such as getting a small business loan or investment loan.

Protect the following detailed items in your credit report like gold!

1. Personal Information Section: This area discloses things like your names, surnames, known aliases, Social Security number, date of birth, your current address and previous addresses, place of work, name of your spouse, open credit accounts, judicial cases and any public document, like bankruptcy and mortgage execution (foreclosure).

This tells a creditor about your character and habits.  They can make assumptions, like changing your residence every few months might show some instability.  If your employment changes often, this might show a bit of a compromise in your ability to pay your debts.

To avoid discrepancies in your file, try to maintain consistency. One example, always use the exact same name when applying for credit.  Simply stated, if you use your middle initial on one application then don’t use your full middle name on the next.

2. Credit Accounts Information: This reports all types of mortgages, personal loans or your revolving accounts such as credit cards.

Also reported are which credit cards are active and which are closed, the amount you owe on each one, total of the minimum payment, if you have made your payments timely, and how many times you’ve been late in making payments.

The best way to take care of your credit is to pay your accounts on time.  The number of late payments as well number of total negative accounts can give you a bad credit reference. In the calculation of your credit score, the number of late payments carries tremendous weight. It represents 35% of your overall score.

If you have difficulties paying on time, call your creditor and negotiate a new payment schedule. That way you will not get penalized for late payments. You will avoid late fees and you can avoid a negative blot in your credit report.

3. Credit Inquiries: Reports all businesses that have requested information on your credit, whether you have applied for a specific credit card or seeking to rent an apartment.

It provides details on businesses that have investigated your record. The details include names, addresses, dates and reasons for the inquiries. To many requests for new credits cards, for example, most likely to portray you as an avid user of credit cards. You could appear as a credit risk, especially if all those credit card requests were approved.

4. Credit Score: This number is created by an algorithm or a summation of scores between 350 and 850 which lenders can determine the quality of your credit and the likely hood of repayment.  All Lenders use slightly different criteria in judging this score but the higher the score the better.

The better you understand the different factors of the credit report the better job you can do to keep your scores at a higher level and over the course of time can mean hundreds of thousands of dollars in saved interest payments.

Lastly, credit repair and clean up of any negative items on your credit report can help raise your credit scores.  Check out this video on how our attorneys can help here.

If you would take a quick second and post a comment about what you’ve read here and anything you think might help others.

Be Bold!

Herschel