|
||
Your Creditors
The most basic function of your credit report is to list your creditors over time and how you paid them.
The creditors can be mortgage lenders, credit cards, student loans, store cards, etc.
These creditors generally report this information to credit repositories where the information is gathered. The reporting is done by identifying you by your social security number.
Each credit line usually has its own account number. You can use this account number when talking to your creditors.
Credit Report Balances
For each creditor the report should generally list what the maximum possible balance is on the credit line, the current balance, and the size of the monthly payment. For a mortgage loan the maximum balance is the starting size of the loan. For a credit card the maximum balance is the credit limit.
Problems On Your Credit Report
Each report generally lists your creditors in one of three categories: current creditors, closed creditors, and delinquencies.
Each creditor will report how many times you were late by 30, 60, 90 or more days. For example, you could have been late on a credit card 2 times by 30 days. You could be late on a credit card by 60 days only 1 time.
If you are occasionally late on smaller items by only 30 days this can usually be explained as an oversight. If you are chronically late that would treated differently by the lender.
Being late on a mortgage is one of the worst things you can do for your credit report when you are applying for a new mortgage.
Creditors differ in the speed that they report your information to the credit bureaus. Some are very fast, and late payments can show up on your credit sometimes in just days.
Additional Credit Report Information
If there are problems on your credit report you should be able to use the credit report to help you.
The credit report usually contains contact information for the creditors, and the account number. You can use these to contact the creditors. Sometimes a creditor will be a name you don't recognize at all. This is usually the name of a credit collection company that now owns your bad debt. The account number on the credit report for that creditor should help you to communicate with them.
You will need to provide documentation about why something is wrong on your credit report. Closed credit lines generally start falling off your credit report after 7 years.
1) Pay your bills on time. A consistent history of timely payments will greatly improve your credit profile and will, therefore, make you more desirable to lenders. In many cases, a strong payment history in your credit reports will also result in better interest rates.
2) If possible, pay your bill in full every month. This will help to save you money in finance charges, especially credit cards with high interest rates, and will make your credit reports even stronger.
3) Avoid carrying a balance of more than 50% of your total credit limit on any credit card.
4) If you notice any incorrect information on your credit reports, dispute it in writing with the credit bureau immediately. You may also find it helpful to contact the creditor directly, notify them of the incorrect information and ask that they correct it with the credit bureau and on each of your credit reports.
5) If you have recently filed for bankruptcy, start rebuilding your credit with either a secured credit card or one that is known to be bankruptcy-friendly. The latter often requires higher interest be paid, but your credit score will begin to rise after three months of a steady payment history is listed in your credit reports.
6) If you have old accounts that are listed as being open, but are actually closed, call the creditor and send a letter to the credit bureau. Often times, creditors simply never report an account as being closed with the credit bureaus. If you have a lot of available credit on your report, potential lenders may wonder why you need all of this open credit and what your plans are for it's use. A large number of apparently open accounts with a zero balance may put you in the high risk loan category if the lender suspects you plan to increase your debt load substantially with your unused credit.
7) Avoid excessively applying for credit as this may lower your credit score because of multiple inquiries.
8) Use your credit cards for necessities only and avoid spending more than you could repay within six months.
9) If your credit cards have excessively high credit limits that you never plan to use, call the creditor and ask that they reduce your credit limit to an amount that you are comfortable with. This will not only reduce the temptation of overspending, but will also prevent potential lenders from seeing that you have a lot of available credit and suspecting that you plan to go into serious debt.
10) The best way to improve your credit reports is to review the information filed with each of the three major credit bureaus every six months. These include TransUnion, Experian and Equifax. A free copy of credit reports can be obtained every 12 months at AnnualCreditReport.com