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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 Cards - A funny Animal

Welcome back to personalmoneystore.com’s payday loans money blog and Part II of this series on personal credit.

Yesterday, in Part I we touched on personal credit and how credit is scored by the credit bureaus who track our financial account information.

Today we will continue our discussion. I’ll talk first about the common misconception regarding building credit that often gets consumers into trouble. I’ll also cover the first steps we will need to take in obtaining our personal credit score.

Common Misconceptions About Building Credit

Credit is a funny animal, and to some degree it works contrary to what we as consumers would consider sensible.

Naturally, we have a tendency to think that if we have a credit card and we make purchases and pay the balance off in full each month, we would get a higher credit score ranking from the credit bureaus.

However, by paying off the entire balance in full each month, the credit bureaus don’t see you as really borrowing any money at all. But, if you pay off your balance in monthly installments, the credit bureaus see you as having a debt and making good on that debt. Therefore, they award you points toward your credit ranking.

It Costs To Have Good Credit

It’s ironic that the the process of establishing a good credit score is achieved through the irresponsible practice of obtaining debt and paying it off more slowly than what would be considered financially smart.

Nonetheless, don’t let this become a crutch. Some consumers fall into the trap of justifying large credit purchases on behalf of their pursuit to obtain that elusive credit score.

Many other things will be addressed throughout this series that will help you strategically build your credit without falling into financial snares that will leave you entrapped in debt.

Many of our customers borrow payday loans just to avoid the late payment penalties on debts they have accrued by making decisions with good intentions but bad financial planning. Don’t let that be you!

The End of the Road for Bad Credit

It's a Hard Road

At this point you may not even know if you have good credit or bad credit. Surely you have some assumptions. After all, nobody pays your bills but you, so you must ask yourself, “Have I been diligent about making my payments on time?”

If so, I would expect at least a fair credit rating, but really there is only one way to find out: obtaining a copy of your credit report.

Obtaining Your Credit Report

Obtaining your credit report is free the first time you request it each year. Each additional request, however, will cost you a little extra money, but the price is usually quite small and affordable.

You are entitled to one free credit report per year from each of the the three main credit bureaus. The first step to achieving or maintaining good credit is to download all three of your credit reports from each of the three main credit bureaus. One may report things about you or your credit history that may be inaccurate and will need to be addressed as soon as possible.

Once your credit is in good standing, you can download free reports from the bureaus individually. That means you can check your credit score every three months, allowing you to monitor your report for discrepancies without having to pay a dime.

To Be Continued…

That concludes Part II of our series on credit. Keep your eyes open for Part III on the payday loans money blog, where we will show you how to obtain your credit reports and understand them.

Credit repair takes a little time, but considering the effects it has on your financial opportunities, it is time well spent.

See you soon!