| Every time you make a payment on your credit card, | | | | copy of your report every year. This allows you to |
| your home or your car it is reported to one of three | | | | check what is being reported to the credit agencies |
| agencies, which are called credit reporting agencies. | | | | and make sure that everything is being reported |
| These credit bureau companies are designed to | | | | correctly. Each time a query is made you usually can |
| provide a record of all your credit related activities. It is | | | | obtain a free copy as well in order to find out exactly |
| this credit report that is pulled every time you apply for | | | | what was reported to the company. When a |
| credit and determines whether or not you are | | | | company refuses credit it usually lists the reason why |
| approved. It is also directly related to your FICO score. | | | | such as too much delinquency or too much debt. |
| This is your credit score or the number used to | | | | Obtaining a copy of your credit report can tell you |
| determine the risk factor that a credit or lending | | | | what they were looking at when they made the |
| company has when they lend to you. The higher the | | | | decision. |
| number the less risk to the credit companies when it | | | | This can allow you to find issues with your credit and |
| comes to you defaulting on your loan or credit line. | | | | make changes because you know exactly what is on |
| You can think of your credit report or the credit bureau | | | | your credit report. For example, say that you make |
| as a place where all the various lenders you borrow | | | | payments on time but they were reported as late or |
| from report to compile all your information, which | | | | alternatively, you paid off a debt in full but it is still listed |
| companies you have borrowed from, which debt you | | | | on your report. These types of errors and differences |
| are paying on time, which you have been late on and | | | | are common. They normally occur because the |
| so forth. All this information is sent to the credit bureau. | | | | company you have the credit with reports at different |
| When you go to apply for credit a query is made of | | | | times. Some report at 30 day, some at 60 and some |
| one or all of the reporting agencies. Your credit along | | | | at 90 days. There are others that may report every |
| with your FICO score and all pertinent information | | | | week or only every 6 months. This can cause issues |
| including addresses where you have lived in the past | | | | when debts being paid or payments made and not |
| 5-10 years is presented to the creditor making the | | | | accurately reported. |
| query. | | | | In order to avoid this, especially with settlements, |
| The information provided gives the creditor an overall | | | | consider requesting that the company report it |
| look at your credit, from this they can determine your | | | | immediately to the credit bureau. This will help to |
| debt to income ratio and other factors that may come | | | | remove these types of discrepancies. To avoid late |
| into play when deciding to lend you or extend you | | | | payments being marked on your account make sure |
| credit. This is why there is such a big fuss over credit | | | | to mail bills out as soon as you receive them or a |
| reports and why everyone suggests that you check | | | | minimum of approximately 10 business days prior to |
| your report regularly to ensure that it reflects accurate | | | | when the bill is due. This will allow the company to |
| information. | | | | process your payments before the due date. These |
| Your FICO score is the number, which is assigned to | | | | types of things are what are reported and listed on |
| you based on the overall appearance of your credit. | | | | your credit report and the things you need to look for |
| For example excellent credit, this means that you | | | | when you obtain your credit report from one of the |
| never miss a payment, always pay in full or pay more | | | | reporting agencies. |
| than the minimum balance, as well as ensuring that you | | | | Your credit report and credit score are important |
| do not exceed your debt income ratio may sit | | | | when it comes to obtaining credit and keeping track of |
| somewhere around 800. People with extremely poor | | | | the credit, you do have. Your credit report is the |
| credit, those who have charge offs, defaults, late or | | | | repository that contains all the information on your |
| missed payments may see a credit score of 500 or | | | | credit history. This usually goes back about ten years |
| even lower. The number may also change depending | | | | and lists everything from credit cards to car payments |
| on the type of credit you are looking for. For example, | | | | to medical bills. Student loans and other forms of debt |
| the FICO score for mortgages is calculated differently | | | | will also appear on your credit history. The FICO score |
| than the scores for revolving credit such as credit | | | | is the numerical representation of your debt. This |
| cards. This is something important to remember when | | | | includes the sum of all your debt including your debt to |
| you are looking at your credit score. You might be | | | | income ratio, late payments, delinquencies and charge |
| significantly lower or higher based on the way the | | | | offs. It also reflects things such as debt that has been |
| scores are calculated. There are number of different | | | | paid off and how much risk you pose when it comes |
| factors that go into the scores which is why the | | | | to lending or extending credit. The government allows |
| numbers can change drastically depending on what is | | | | one free credit report per year in order to facilitate |
| counted and what is not in the score. | | | | making sure that information is accurate and up to |
| The reporting agencies and the credit bureau in an | | | | date making it easy for you to manage your credit |
| effort to make it easier to keep a track on your credit | | | | history. |
| and your credit score allow you to obtain one free | | | | |