What's On Your Credit Report And Why Does It Matter
Posted: June 14, 2012
Let's first start with why does it matter what is on your credit report and how high or low your credit scores are.
Doors open when you have good credit scores. You get approval for loans for a new car, a new home, credit with a bank and things like credit cards at decent interest rates. Doors open for new jobs or promotions on an existing job.
If you need to borrow money to open a business then your credit scores could make or break that possibility.
What's On Your Credit Report
Do you have a copy of your credit report? Do you know how to get a copy of your report if you don't have one? Did you even know that you can get a copy of your credit report and scores?
First off, if you don't already have a copy of your credit report and credit scores then you should start by getting one. The government has provided for everyone to be able to get a free copy of their credit report once a year. This will show you what is in your credit file but will not give you your credit scores.
On your credit report you will find your personal information such as name, address, social security number, etc. Then you will find an entry for any credit that you have had in the past that has been reported to the credit bureaus by those past or current creditors. All creditors do not report your debt and credit activity to the credit reporting agencies. Usually small local retail stores or car dealerships don't report their consumer's activity to the credit reporting agencies.
Some things, like rent activity, won't show up on your credit report unless you move out without paying all your rent due. In this case, the rental agency may file for a judgment against you for the money owed and this judgment will be reported to the credit reporting agencies and be posted in their files about you.
Other things you may find on your credit report are entries for student loans, car or mobile home repossessions , delinquent income taxes due and a collection item for unreturned cable boxes.
Things That Are Important to Check
Once you have a copy of your credit report then these are some of the things you should look for to see if you need to take any actions with regards to your credit history and credit scores:
- Make sure that all your personal information is correct. Is your name spelled correctly? Is your middle name or initial correct? If you are a Sr. or Jr. is that depicted correctly? Does your current address match where you currently live? All this information helps to make sure that items being posted to your credit file are matched up properly to you.
- Next make sure that all tradelines (credit items) are indeed yours. Did you really buy the car listed on your credit report or is the credit cards listed all yours?
- Check all late payments posted to any of your tradelines. Late payments are normally posted under some columns titled 30,60,90 and 120+. Make sure that you were indeed late on any late payments posted to your file.
- Check to make sure that the balance due on your credit items are correct. The balances are usually a little behind to what you have actually paid. So, if the balance is within one or two recent payments made then it is probably on target.
- Look at the public records section. This is where you will find things like judgments and entries for unpaid taxes. Many times people have actually paid these off but they are still showing as outstanding on their credit reports and still negatively affecting their credit scores.
- If you have student loans make sure that the balances are correct. In addition, if your student loans are deferred make sure that is the status showing in your credit history.
The general idea here is to make sure that your credit report depicts everything about your past credit activity correctly.
You wouldn't go for years without checking your bank balance and making sure that items posted to your bank account are correct, so why do that with your credit report and scores. In this day and time your credit score is really as valuable to your financial health as the money you have in the bank.