|
|
Frugal
Living Thrift
Saving Money Penny Pinching
Home
Frugal Living Tips and Frugal
Living Articles for
Frugal Happy Families
|
Search Frugal and Simple Living Sites by Keyword
Below
|
Tips On How To Read Your
Credit Report
by Suzy Vanstrusen
Most people know that a credit report is very important. However, some of them
are not well-aware of other things such as how to read it. In this article, I
will enumerate some tips on how you can read your credit report. We will also
discuss ways to fix it and improve your credit score.
Your credit report
Your credit report is divided in four parts and these are your personal
identity section, your credit history, public records (if any), and the
inquiries made by to your report. The first section obviously contains details
about your personal identity while the other three sections contain information
about you and your relationship with creditors, insurers, lenders, and
employers.
Keep in mind that a credit history will reveal everything that concerns you
and your creditors. This is where all your accounts, debts, unpaid charges,
credit limit and payments are recorded. The next part of your report is the
public records section where tax liens, bankruptcy, foreclosures, judgments and
other legal remarks are reflected. An ideal credit report should have this
section blank or empty as any remark contained here can affect your credit
rating really badly.
The last part of your credit report is where all inquiries from potential
creditors, insurers, employers and other companies are reflected. If you
submitted a credit card application or a loan application, your prospective
lender will be inquiring about your credit report and you can see it under this
section. Such inquiries are called "hard inquiries" and can affect your credit
score. But inquiries that are initiated by companies who are interested in
offering you credit are called "soft" inquiries and will not damage your credit
score.
Your Credit Report Score
The system of calculation used by the three major credit bureaus and most
companies is the FICO system. The FICO score ranges from a low of 300 to a high
of 850. Each lender has different sets of qualification when it comes to
considering a credit score. However, a credit score of 700-750 is usually
considered as good while a score of 750-800, excellent. Obviously, with a higher
credit score, you can bet on the approval of your application and demand for
better rates or higher credit limit. A score of 650-700 can be considered fair
and it would be up to the lender whether you'll be granted an approval or not.
A score of 600-650 is considered as bad and a score of 600 and below makes
you a high-risk borrower. In such case, your only chance of getting approved is
if you apply for a bad credit or a sub-prime credit card or loan.
Improving Your Credit Report Score
After reading your credit report and finding out about your credit score,
you can now gauge your status to prospective creditors. If you're thinking about
applying for a credit card or a home loan, reviewing your credit report is a
must. What should you do if you find that your credit rating is low? It is
advisable to work on improving your credit score first before submitting your
application to any lender. This will prevent rejection of your application which
can only worsen your current score. It's best to wait to wait at least six
months and pay off your unpaid debts to your existing creditors. Keep up with
your payments on time and you should see a progress in your score after a few
months. By this time, you will be more prepared to take on a new account without
fearing rejection.
© Suzy Vanstrusen is a credit analyst and a writer of the website
http://www.ezcreditrepairsolutions.com and has been providing
consumers with tips and tricks in repairing your credit. Check the site for more
free credit repair and
credit report score. |
Home
|
|
