Credit Part III: Obtaining and Reviewing Your Personal Credit Report
The payday loan money blog continues Part III on personal credit with obtaining and reviewing your personal credit report. Here’s how.
A quick Internet search will reveal several sites you can use to order your credit report, but if you want the one that I use, it’s www.freeannualcreditreport.com. This site is a reputable source and will allow you to print off all three of your credit reports from each of the three main credit bureaus.
You will be asked some personal questions in regard to previous street addresses or credit accounts that will help them identify you as the person you say you are. Once you get through these preliminaries, you will be able to print off your report for review.
Understanding Your Credit Report
After printing off your credit report, the next objective is to carefully review it for any discrepancies. By discrepancies I mean anything that appears to be incorrect.
You may have misspelling in your name and address or you may have credit accounts listed that don’t belong to you. This could be a result of identity fraud or perhaps just a recording mistake made by someone else’s creditor or the credit bureau themselves.
Reading your credit report can be confusing at first, but after a short examination you ought to be able to make sense of it. Your credit report will be divided in to several sections. Here is some helpful information describing each section you will find on your report.
Section 1: Personal Information
The section on personal information is the easiest part of your credit report to read and contains information such as SSN, Name, Address, etc. Double check the information here for accuracy before moving on.
Section 2: Credit History
The credit history section contains the bulk of the information on your credit report. It lists all the information for your past credit accounts including the date they were opened, closed, account numbers, names of your creditors and if you still owe a creditor, the minimum payments, the total balance left on the account and the current status of the account whether delinquent or in good standing.
If you possess accounts that are not showing on your credit report, it may be because they are relatively new or the account resides with a company that doesn’t run credit checks when applying for their service. This would include companies like payday loans lenders. Some payday loans lenders don’t require credit checks at all, making them a prime source of extra cash for individuals with a bad credit score.
This information is pretty straightforward, but there may be some things you question, so I will list them below for your understanding.
- Internal Collection: The creditor is in the process of trying to collect the debt.
- Charged Off: The creditor tried to collect the debt, couldn’t and threw
in the towel. - Numbers prefaced by R or I: You will see a lot of the numbers on your accounts prefaced with the letters R or I. “R” stands for revolving credit accounts where “I” stands for Installment loan accounts. The lower the number that follows, usually between one and nine, the better the payment history on that account.
Section 3. Public Records
If you have anything in the public records section, you have a long road of credit repair ahead of you. This is the section where things like defaults and or bankruptcies are reported and is a big red flag to anyone thinking about extending a line of credit to you.
You will have to be diligent and patient as these things can take a long time to cycle of your credit report. For example, a bankruptcy can take as long as 10 years to cycle off.
Keep in mind, however, that these public records are easier to deal with as they get older, provided you maintain a clean credit history between then and now. Your credit score, however, won’t come to its full potential no matter what you do until they clear off your report altogether.
Section 4. Inquiries
An inquiry is marked on your credit report whenever the creditor you’re applying for financing through checks your personal credit. These inquiries could also be insurance providers as well as employers you applied with and gave consent to run your credit.
The more credit inquiries on your account, the more risky you appear to creditors as they might tend to think you will overextend yourself with two many open accounts and therefore not be able to pay them on time.
The number of inquiries typically doesn’t affect your credit score too much, but as a general rule of thumb you will want to be conscious of how often you are opening or applying for accounts or services that require a credit check.
In Conclusion
Take the time to download and review your credit report and join us again for Part IV of this series on the payday loans money blog.
I hope your report fares well!
Credit has become an increasingly larger part of the American life over the last fifty years. It used to be that the only loans a person ever took out were for a home and for a car, maybe two, but never for anything else. With the rise of credit cards, the amount of credit spending has skyrocketed, and the effects of it have hit virtually every American in various ways. The credit report website above is certainly better than the ones you see on TV that may or may not feature an annoying band that requires you to buy into an annual membership.