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| Credit & How to repair it. |
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A credit report is a history of how you have managed and paid your financial obligations.
The credit history is a compiled report from three private reporting companies, or credit bureaus: Equifax, Experian, and Trans Union. They provide your credit report to banks and other creditors so they can review your application.
Your report will provide your social insurance number, full name, account numbers, debts (including credit cards and auto loans), and derogatory or bad credit (i.e. collection accounts, late payments).
Tax liens and bankruptcies are public records and remain so for a number of years. When you request credit, the lender will perform an inquiry to establish your credit worthiness. The inquiry will appear on your report including the date and who made the inquiry.
When shopping for rates or terms for loans, do not let all your contacts make inquiries into your credit history. A number of inquiries in a short period of time will negatively affect your credit score.
Bankruptcies, foreclosures and any derogatory credit are deleted after seven to ten years. The three reporting agencies continuously update your file to reflect the latest information.
In order for your report to be as accurate as possible, you should examine your file from each of the reporting agencies, as the information can vary between agencies.
The Fair Credit Reporting Act (FCRA) allows you to receive one free credit report during any 12 month period if: you are unemployed and intend to apply for a job within 60 days; you’re receiving welfare; or you think your report has inaccuracies. To obtain a credit report, contact Equifax, Experian or Trans Union, directly. It will cost you appx. $23.00
If you have been denied or declined credit in the last 60 days, you can also receive a free copy of your credit report.
Repairing your credit does not have to be difficult.
- Pay bills on time: Your credit history, or how you have paid your bills in the past, often indicates you will pay in the future. Credit scores represent your most recent payment history. If you have had a problem, start paying on time.
- Pay the minimum amounts: If you have a lot of debt, at least pay the minimum amounts. As your situation improves, pay more.
- Keep credit card balances low: Use credit cards only when you know you can pay the balance.
- Don’t open numerous accounts: When purchasing a new home, you may want to make a lot of changes. Wait until after you buy your home to make big purchases and save for items rather than opening new lines of credit.
- Establish credit if you have none: If you have little credit, you may want to open a credit card account and pay the balance off when the statement is received. Do not forget that your landlord, utilities and auto insurance can also be used to establish credit.
Remember - credit scores reflect your payment habits for the last two years. Credits: www.buyersfund.com
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