Keeping track of your credit is important for many reasons. Your credit report
and credit score determines whether you get a loan and what type of interest
rate you receive. It also plays a role in how much you pay for insurance and may
affect whether or not you qualify for certain jobs. That`s why you should know
what`s on your credit report.
Your credit report has several elements, the most important of which is both a
current and historical listing of your credit accounts. Your report will list
both open and closed credit card accounts, mortgages, auto loans, personal loans
and any other type of credit from a company that has reported it to the credit
bureaus. It will list when you opened each account, the date that any were
closed, your current balances on the account and the credit limits of revolving
In addition to listing the accounts, your report will list your payment history
for each one. It will have any current past-due payments as well as any past
delinquencies. Keep in mind that most information on your credit report stays
there for up to seven years and, in some cases, 10 years. This is true even for
accounts that have been closed.
Another thing your credit report will contain are credit inquiries. Any time you
apply for a loan or a credit card, the company asked to issue the credit will
check your credit report to see if you are an eligible candidate. These checks
of your credit are called inquiries and they are recorded on your credit report.
Having too many inquiries on your report can hurt you, because potential
creditors may view a large amount of inquiries as a risk, since it may indicate
you are aggressively seeking credit. The good news is that several inquiries in
a short period for the same purposes, such as shopping around for an auto loan
or a mortgage, are treated as one inquiry.
The final thing that your credit report contains is information on judgments and
other adverse financial actions against you. If you declare bankruptcy, lose
your house to foreclosure or have collections agencies after you, it will be
reported on your credit report. Tax liens, wage garnishments and lawsuit
judgments will also probably make it onto your report.
One thing you won`t find on your credit report is your credit score. This is
calculated separately and you usually have to pay to get a copy. You can,
however, infer whether your score is good or bad based on the information in
your credit report.
It`s important to keep track of your credit score and the government makes it
easy to do so. Each person is entitled to a free copy of their credit score
annually from each of the three main credit bureaus. These are Experian, Equifax
and TransUnion. There is a website, annualcreditreport.com, where you can do
If your credit score is bad, the way to improve it is to correct some of the
blemishes on your credit report. If you have late payments or accounts in
collections because you are struggling with debt, the experts at nationaldebtrelief.com can help
you formulate a plan to get out of debt.