Everything You Always Wanted to Know About Your Credit Report


1 – What is it exactly? Who consults it?Credit Report

The credit report is a file created by one of the credit agencies, once a person takes or makes a credit application for the first time. The information will accumulate potential lenders to evaluate its behavior in credit and make a decision to grant or deny a loan or credit. Homeowners also use the credit investigation before signing a lease, to verify if lessees honor payments. Some insurance companies also require permission to access the credit report: they offer discounts to customers whose credit rating is good.


2- from where they get information?

Information derived from several sources, so that the credit report is constantly updated. Banks, credit unions, finance companies and retailers regularly send information concerning transactions with consumers. Utilities such as telephone and electricity are not included in the credit report, but some cell phone companies are part of the late payments to credit bureaus.


3 – Can we see it? If so how?

It is possible and even advisable to check your credit in order to be able to monitor his condition and, if necessary, make some changes in our organization or our payment consumption. The fact of accessing to the file can sound an alarm or reassure uncertain consumers. Credit agencies offer online consultation or mailed. The mailing will be done for free, but a fee will be charged for access to the file via Internet.


4 – What is a credit score?

It is a score representative of your financial situation. The resulting number, which is between 300 and 900, allows lenders to know your financial health at a specific time. Some will rely on it to determine the interest rate of any loan requested, as the score shows the risk that a consumer can represent from different donors. They also determine a score “floor”, that is to say, the lowest score a person can have while still being able to get a loan.


5- What is the credit rating?

The credit score is the score on a scale of 1 to 9, the assessment shows that lenders make each experience credit record of a person. A rating of 1 means that the amounts have been resolved in time while a score of 9 implies difficulties and delays in payment. Having a good credit rating is among the ways to build credit.


6 – What is taken into account in calculating the odds?

Elements analyzed to calculate the rating are the following: payment history (about 35%), amounts owed (about 30%), and the age of historical (approximately 15%), new credit (about 10%) and types of credit used (about 10%). This is in attendance payments that are most important in the calculation of the score, followed closely by the amounts to be paid. Then take into account the time elapsed since the first credit application. A person who has a credit card and making payments on time for 25 years will have a higher rating than that which has only two years. The recent credit will also be analyzed, since the demand in a short time several sources of credit are in the eyes of lenders, a higher risk. Finally, the kind of credit on file will play on the calculation of the odds. For example, the mortgage is best seen as the card or line of credit. In addition, the limit of cards and lines of credit are also taken into account in the calculation, even if it is not reached. Thus, lenders consider the maximum is used to avoid surprises after the granting of a loan.


7 – How long do they keep the information on file?

Although in theory, there is no fixed term for data retention, we note that the various agencies no longer take account of them after 6 or 7 years. By cons, especially in the case of a credit card, the date of opening of the account will remain on file, but only information of the past six years will be considered. When we talk of bankruptcy, the data may remain on file for a longer period, even up to 14 years in the case of multiple bankruptcies.


8 – How late payments affect the credit report?

Everything depends on the type of payment that is overdue and the number of days of delay in question. For example, an exceptional delay less than 30 days will not cause any particular problem, the same for a delay of less than 60 days. However, the situation should not be repeated often. When we speak of a longer delay which recurs frequently, the credit report will be affected. A delay can always be justified from credit bureaus, which can put a comment in the report. However, it is not guaranteed to be taken into account, especially when the next calculation of the score or so when a lender will consult the report.


9 – How can we build a good credit record?

The only way to ensure a good record is still paying the bills on time, even if the minimum payment required by the lender. However, it may be difficult to obtain a loan for the first time when there is no credit history found in the credit report. Some lenders will want to be certain that payments will be made. Also, the fact of requesting a credit card and using it reasonably still paying the minimum amount allows you to demonstrate your financial health. Having a good credit report is one of the best ways to build credit.


10 – How to correct errors that credit report contains?

An error may be reported to credit bureaus, which will fill a request that the information be verified with the concerned lender. If the lender does not recognize the error and that the agency refuses to make a correction, it is possible to request a dispute with the Commission access to information, later than 30 days refusal. It has the power to require agencies to correct the error on the report, if it considers that the request is justified.