May 23, 2013
 

Your Credit Report and You

Comment May 23, 2013 by Maureen

 

There are three main nationwide credit reporting agencies – Equifax, Experian & TransUnion.  These agencies are required by the Fair Credit Reporting Act (FCRA) to provide an individual with a free copy of their credit report once every 12 months.

This report can be ordered three ways – online at annualcreditreport.com, by phone, 1-877-322-8228, or in writing by completing the Annual Credit Report Request Form and mailing it to Annual Credit Report Request Service, PO Box 105281, Atlanta, GA 30348-5281.

Your credit report is a snapshot of your financial background. It includes identifying information such as current and previous addresses, current and previous employers, your social security number and date of birth. It also includes information from lenders on the type of account (mortgage, credit card, unsecured), when opened, credit limit and payment history. Public records such as bankruptcy, wage attachments, civil judgments, child support and collection items are listed as well. All of this public information is sold to credit card companies, banks and employers who typically will use it when making decisions about whether to extend credit or hire you.

Your credit score, also known as your FICO (Fair Isaac COrporation) score, is comprised of several different pieces of data in your credit report. They are grouped into five categories – payment history, credit utilization, length of credit history, types of credit used and recent searches for credit. Each category is weighted and can vary according to the length of credit history. For example, payment history typically is the largest percentage of the score so it is important to pay your bills on time. Another large percentage which makes up your credit score is credit utilization. This is calculated by the amount owed in relation to your limit. If you have balances that are high relative to your limit, it will affect your credit score. Other items that will affect your credit score are settling on a credit card debt, foreclosure, short sales and bankruptcy.

It is in your best interest to order a copy of your credit report each year to verify that your information is current and correct. This will also help protect you against Identity Theft. If your credit is affected, the sooner you know, the faster you are able to respond.

Maureen - Consumer Loan Processor

 

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