Upon first viewing your credit reports there is a sudden feeling of confusion. There is so much information, some of it you've never seen before. There is all sorts of coding and words you don't even understand. It can become very upsetting. But don't fear! We are here to help you make sense of the chaos that is a credit report.
There are three credit reporting bureaus. They are: Equifax, Experian and Trans Union. Despite what you may believe, these companies are not government owned and operated. They are all independent of each other and are out to make a profit. How do they profit? Well, there are many ways.
One way they profit is by selling your credit score and information to creditors. Those creditors pay to see your information in an effort to decide if you are credit worthy. When your credit is pulled at your request when applying for credit this is called an inquiry. All your inquiries are listed at the end of your credit report. This particular type of inquiry is often called of hard inquiry. Every 3-5 inquiries can hurt your score 10-35 points.
Creditors will also buy only credit scores and information from credit bureaus. For instance: For instance: Citibank may pay Experian for the name and address of everyone in the Chicago area with a credit score of 550-625. They often ask for lower credit scores because they are able to charge more interest and make more money. When credit bureaus sale your information like this it will show as an inquiry on your credit report. This called a soft inquiry.Bureaus claim that these do not hurt your score. But we've found this is not be true. All of our clients are put through a system so that the bureaus are unable to sell their information keeping their score from taking a hit. Our clients also have all their inquiries disputed to help keep their score high.
Most credit reports also list your name, address, phone number, and occupation on the first page (Experian puts it at the end). It is important that they have all your current information correct. If you move you need to do a change of address with the post office immediately and contact our office.
Experian and TransUnion list your negative accounts before your positive accounts. Equifax mixes them all in. Each report is coded differently. Read the coding information located at the beginning of each report before reading on. Experian is not coded. It lists all information word for word.
Each line of credit contains the same information: creditor, account number, date opened, date closed, credit limit, balance, recent payment, date to be removed from report, and typically a creditor's statement.
Sometimes you may not recognize the name of a credit grantor listed. This is typically because it is an account that has bee sold to another company. If the account is listed as negative and you believe it may be identity theft contact our office immediately.
It is important to know the date that an account was closed. Bankruptcies will stay on your credit report seven to ten years from date filed. Slow pays, collections, and repossessions will stay on your report for seven years. Often you will find an account on credit that is older than this. It is very important that those items are removed. Collection accounts are tricky. They will stay on you credit for seven years from date of file. But, if five years later you pay this account in full the account will be re-opened and will be on your credit for another seven years from the date of payment.
You also need to be sure to check your credit limits and balances. On credit card accounts it is best to have your balance below 50% of the limit. Paying your cards down to this amount will give your score a sudden boost. It is better to have three cards with balances below 50% than to have two cards with no balance and card maxed out. Also, if you pay off a credit card that was once maxed out and has no slow pays, do not close the account. Much of your credit score is based on length of established credit. By closing the account you will often see a lowered score.
The recent payments can be confusing. This section will list all your slow payments with an emphasis on the last 24 months. They look at this period of time because it has the most influence over your score. Experian will list the date and how long an item was late very simply on the right. TransUnion list out the last twelve months in boxes and will put the amount of day late in the corresponding box. Equifax will list the dates with numbers coded to represent the amount of days late (1 is 30 days late, 2 is 60 days late, 3 is 90 days late). Equifax will also use this section to mark when an account was charged off or repossessed by using the appropriate coding.
Each line will also give the current status of the account. It will list if ti is open and paid as agreed, closed, collection account or repossessed. There is sometimes also a comment listed by credit grantor stating that the account was closed by them or by you.
It is very important that all information is correct for each line of credit. If you believe you have incorrect information on your credit report please give The Weathersby Group a call. We can help you make sense of your report and correct information.Did you know you are entitled to a free credit report yearly.
You can acquire one at annualcreditreport.com.Or you can purchase a credit report at VantageScore.com for $7.95.Contact me at 1-888-298-9104 Ext. 8636 (24 hour recorded message) to learn more.
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