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Understanding Your Credit Report
Author David Schneider | May 23,2007
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Erik was 35 years old and he was thinking about buying a bigger home in the near future. He figured that now was a good time to review his credit report. After all, he had 8 credit cards, 2 car loans, a boat loan, a mortgage and several student loans on this report and he wanted to make sure that all of the information was accurate before he tried to apply for a larger mortgage. Erik thought that because he was never late making his credit card and loan payments that this report would show his credit rating nearly perfect. However, when he got his credit report he was surprised to see that it said his credit rating was fair. What had he done to lower his credit rating so much? The answer was that he had too much debt. Understanding your credit report is important to learn how to do if you are interested in improving your purchasing power and credit rating.
Where Can You Get Your Credit Report
Understanding your credit report starts with requesting your credit report from the credit reporting agencies. You can order your credit reports directly from the reporting agencies, or you can subscribe to a credit report service. These services will allow you to view the activity on your credit reports any time you want during your subscription. You also have the option of viewing your report online or printing out your credit reports.
The Four Parts of a Credit Report
Once you have your credit reports, your next step is to examine the different parts of the credit report. In the first section of the report, you will find your identification information. You should find your current address, your previous addresses, your name, social security number, phone number and date of birth. If you are just starting your credit history, then you should try to use the same name every time you fill out a credit card application or loan application. This will help reduce the clutter in this section of your report.
The second section of the report contains information about legal judgments against you for debt collection, divorce information and bankruptcy information. Creditors look at this section to determine what type of credit risk you are. It is also a good indicator of how responsible you are as a borrower. Finally, divorce dates in this section will help lenders separate your credit history from your former spouse's.
The third section of your credit report contains information about your credit accounts and payment history. This section will also include negative activity in your bank accounts, utility accounts and other regular bill accounts. Accounts that are less than six months old will tend to bring down your credit rating. This is because you are more likely to let young credit accounts to go unpaid or pay them later than older accounts.
The final section of a credit report contains information about who has looked at your credit report. The number of credit report inquiries and when they occurred can influence the health of your credit score. A high number of recent inquiries can damage your credit score because this usually means that the person is trying to take out additional lines of credit.
Let QuoteMatch.com Help You
One of the most popular reasons why people request their credit report is because they are thinking about taking out a new mortgage. If you are ready to find a mortgage lender, then QuoteMatch.com can help you. They have an extensive database of lenders who work with people who have all sorts of credit ratings. Now that you have taken control of your credit history by learning about understanding your credit report, you are ready to look for a lender. Go to QuoteMatch.com today for your free, no-obligation mortgage quotes today. |
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