What is a Credit Report?
Thursday, August 31 2006 @ 04:58 PM Eastern Daylight Time
Contributed by: Admin
Whenever you apply for any type of credit or financing,
a credit report is pulled from at least one of the three
major credit bureaus. While there are hundreds of
smaller credit bureaus around the country, virtually
every credit bureau is affiliated with Trans Union,
Experian, or Equifax. These credit bureaus collect and
maintain information on the vast majority of Americans,
but they are not affiliated with the government in any
way. The credit bureaus are for-profit corporations that
sell your personal information for money.
The credit bureaus receive your personal information
through the same lenders who grant you credit. They have
agreements with each of these credit grantors that
require the credit grantor to inform the credit bureaus
of everything that occurs in your relationship with the
credit grantor. If you make a payment late, the negative
credit listing is quickly reported to at least one of
the three major credit bureaus and is added to your
credit history.
Credit reports are not just a record of how you are
currently managing your credit accounts. Credit reports
are histories of everything you are doing with your
credit now, and everything you have done in the past.
The credit bureaus collect this information, list it on
your credit report, and then sell it to credit grantors
who wish to see your credit history before they decide
to lend you money. The credit grantors who review your
credit are especially interested in any negative credit.
If you have shown any tendency to pay late, or to
disregard your financial commitments in the past, then
the creditors' computers will immediately reject your
application. Just like when you were in grade school,
your credit report is your financial report card to the
world.
What Kind of Information Appears on the Credit Report?
Merchant Trade Lines: These include all regular
credit lines such as department store cards, auto loans,
mortgages, and credit cards. If there is any history of
late payment, or if the trade line was included in
bankruptcy, charged off, or put into repossession, the
listing will be considered negative by all credit
grantors.
Collection Accounts: When an account is referred
to collections because of delinquency or because of a
bad check, this appears on the credit report as a
collection account. Collection accounts can appear as
paid or unpaid accounts. Any type of collection account,
whether paid or not, is considered very negative by all
credit grantors.
Public Records: Public records include
bankruptcies, judgments, liens, satisfied judgments, and
satisfied liens. All court records, including
satisfactions, are considered negative by all credit
grantors.
Inquiries: Every time a potential credit grantor
looks at your credit file, a credit inquiry appears on
at least one of your credit bureau reports. If the
number of inquiries is very few over the last two years,
then there may be no negative effect on your credit
worthiness. However, if there are many recent inquiries
showing on your credit report, credit grantors may
become nervous and deny you credit.
How Long Will Negative Information Stay on My Credit Report?
The Fair Credit Reporting Act (FCRA) requires that most
negative credit items be deleted from your credit bureau
file in no more than seven years, except for a Chapter 7
bankruptcy which can be reported for up to ten years.
These are the time limits for reporting negative credit.
The creditor or the credit bureau can choose to have the
negative credit information deleted whenever they
please. Inquiries may remain on the credit report for up
to two years.
Lexington Law Firm
is a professional credit repair
company that can help you with this.
Can I See My Credit Report?
Most credit grantors are not allowed by the credit
bureaus to show you your own credit report. But you can
purchase your credit report from the credit bureau for a
fee. Once you receive your credit report, you may find
that you cannot read it because the information is
listed in an unfamiliar code. Trans Union and Equifax
credit reports are particularly difficult to interpret
and understand. Experian credit reports, however, are
relatively easy for most people to read. Your best bet
would be to order a 3-in-1 combined bureau report since
they are the easiest to read. To order one, visit
www.creditrepair.com.
How Much Bad Credit Does it Take for Me to be Denied Credit?
As you may have already experienced, even one small late
pay listing may result in credit denials. It is a myth
that a large amount of positive credit can outweigh some
negative credit. Any negative credit whatsoever can
become a substantial credit obstacle.
Who Looks at My Credit Report?
With the passing of each year, your credit report is
used more and more often as a yardstick to measure your
character. Prospective creditors will always review at
least one of your credit reports before granting you
credit. Today it is increasingly common for insurance
companies to review your credit before extending auto or
health insurance. Many employers now check credit before
they consider you for a position. If you rent, you may
have already been through a credit check to determine
your worthiness as a renter.
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