Your Credit Report gives the basis for credit reporting companies to rate your credit scores. Hence understanding your credit report is the first step towards your credit repair endeavours. Yet many people find it a hassle to understand how the credit report is derived. This could be detrimental to your credit score should you not rectify the problems in your credit reports.
Here we will provide you with the basics of who reads your credit report, what is recorded in your credit report, what is a credit score and where to get free authentic credit reports.
Your Credit Report. Who Actually Reads Them
Knowing who reads your credit report is the first step towards correcting your credit problems. Understand that you must have given authorised permission before any third party can view your credit report. The common parties accessing your credit reports are namely your potential lenders, bankers and insurers. Other parties who have a vested interest to analyse your credit report includes the courts as well as debt collection agencies. It might come as a surprise to you that potential employers are increasingly requesting for permission to access your credit report as a basis of testimonial for a good credit history.
The Key Components of Your Credit Report.
The key components which make up a credit report includes your personal information, your credit history on your past and current outstanding debts, collection reports if any, public record information if any, inquiries made by lenders and creditors your credit history and any other additional information. Other additional information would include your employment history which could shed light on you as a stable debtor in debt repayment. Finally, your credit score is calculated from the cumulative information in your credit report after assigning different weights to the above mentioned criteria.
Your credit report keeps your credit history over a period of time and is removed thereafter. Your credit and collection accounts are kept up to 7 years from the date of the last activity with the original creditor. As for Chapter 7 or Chapter 11 Bankruptcy, information dates back to 10 years from that which is filed. All other court records are kept for 7 years.
The Range Of Your Credit Score.
The good functional credit score ranges from 720 to 850. The lower the score the greater the risk you are to your lenders or potential lenders. If your credit score is about 750 to 850, keep up the good habits and never let up. Should your credit score falls to 660 to 720, there is cause for alarm and you should start reviewing your credit report immediately as you would be considered a much higher credit risk in the eyes of your lenders. Credit scores between 620 and 660 are deemed uncertain and any credit scores less than 620 are deemed risky.
Get Your Free Credit Report on an Annual Basis
You are entitled to one free Credit Report annually with each major Credit reporting bureaus, namely Equifax, TransUinon and Exeprian. In additon whenever the credit reporting bureau make changes to your report, you should request for a free updated credit report for your reference.
Understand that as your credit report is a fluid document and not a static statement of your personal accounts, there are bound to be errors and hence, it is critical for you to constantly review and update your credit details at least yearly for accuracy.
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Joey Lee has 17 years of banking, financial, business & marketing experience, holds a CFP & an Executive MBA, and a Platinum Ezine Author. Learn authentic Credit Repair skills and comprehensive information on www.creditrepairskills.org/credit-report-analysis-tips"> Credit Repair Tips , credit reports, credit scores at CreditRepairSkills.org
