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The Importance of Checking Credit Reports Regularly

bbcred — Thu, 17 Feb 2011 01:04:06 +0000

Would you like to know why people are encouraged to order a copy of their credit reports from the three credit reporting agencies regularly? In this article, let’s talk about the importance of checking your credit report.

Why Review Credit Reports Regularly

For the protection of credit prospects. Having an impressive credit score not only gives you the advantage to win quick approval but also better offers from potential lenders. Many lenders reserve their best deals for customers with a high credit rating. Meanwhile, a poor score may limit your options when it comes to choosing loans, credit cards, and other financing deals.
For determining whether a credit repair service is effective or not. If you have bad credit or a problem with your credit history, you may consider getting help from a reputable credit repair or credit counseling agency. To check your progress, you will need to take a look into your personal credit report and see whether you are able to improve your score.
For the immediate detection of identity theft. Another very important reason why consumers are advised to check their credit reports at least once every six months or twice a year is because of the threat of identity theft. You may not know that thieves are using your personal information to commit credit-related crimes against you.

By checking your report, you can see whether there are unauthorized charges or suspicious activities in each of your account. By checking your report, you can alert the credit bureaus right away and request for corrections before the problem becomes serious.

For correcting erroneous details or information. Sometimes a creditor may report erroneous charges to the credit bureaus. There are also instances when the bureau itself may commit the mistake in recording the details in your file. It is also possible that another person’s credit file gets mixed up with your own file.

These possibilities may badly affect your personal credit rating and if you will not check your report, these errors will pull down your score. On the contrary, checking your credit report gives you the opportunity to correct such errors before a prospective creditor makes an inquiry in your file.

About the Author

Shelly Evans is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing bad credit personal loan and credit cards for people with bad credit.

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The Bad Elements On Your Credit Report

bbcred — Tue, 21 Oct 2008 03:53:37 +0000

Your credit report contains important information about you. It contains your full name, SSN, birth date, driver’s license number, past and present home addresses, and your employment history. Your credit report also contains information about your past and present transactions with various financial companies.

Your credit report completely reflects all your accounts- the date these were opened, what type of accounts these are, your debts as well as your payments. In short, your credit report defines your credit worthiness as an individual.

Creditors and financial institutions, as well as landlords and employers check on a person’s credit report to evaluate credit worthiness. Those who have poor credit report and those who do not have a credit history usually find it more difficult to obtain loans, bank accounts, and employment. Hence, it is crucial to be aware of your credit report status and ensure that your credibility and reputation is protected.

Here are the elements that you never want to see in your credit report. Having these bad elements in your report can greatly damage your credit worthiness. Therefore, do all your best to avoid them:

Unpaid Balances. Balances that are left unpaid for 6 months or more can be considered as “charge-offs” or “uncollectible”. When your creditors deem your debts as charged-off or uncollectible, it will be reflected in your credit report and will remain there for up to seven years.

Accounts in collection. Even if a creditor has already deemed your debts as uncollectible, they may still hire a third party debt collector to collect your payments. This means, you will still be required to pay but your credit report has already been damaged.

Bankruptcy. A record of bankruptcy will remain in your credit report for seven to 10 years. Some people have managed to slowly rebuild their credit after being discharged from bankruptcy. However, a record of bankruptcy creates a very negative impression and may take quite some time to rebuild.

Foreclosure. If you have mortgage loan that you failed to pay off, your lender will be filing for foreclosure. Not only will you be losing your home property but a record of foreclosure will remain in your report for seven years. This means, you’ll have a harder time convincing lenders to grant you new loans.

Tax Liens. Tax lien will remain in your credit report for 15 years and 10 years if you choose to pay them. Not paying your taxes is a grave offense which can result to losing your property. If your mortgage loan has been foreclosed because you did not pay your taxes, you will be still accountable to pay for your mortgage.

Law suits. If your creditor files for a lawsuit against you because of unpaid debts, it will remain in your credit report for seven years.

Credit Inquiries. All inquiries from the creditors you submitted applications to will be reflected in your credit report. Too many inquiries and rejections can also affect your credit rating.

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ABOUT THE AUTHOR
Shelly Evans is a credit analyst for Bad Credit Resources for seven years. This website offers resources that specialize in providing bad credit personal loans and bad credit credit cards to people with poor credit score.

The Secrets On Reading Your Credit Report

bbcred — Fri, 12 Sep 2008 04:40:14 +0000

Cases of identity theft and credit card fraud are alarming and we all want to be protected. The FTC advises all consumers to be more aware about the status of their credit reports as this can make a big difference in keeping track of possible identity theft or fraud.

In this article, we’ll discuss some tips on how to read your credit report and the correct steps to fixing your credit. Hopefully, this can bring more awareness to consumers about the importance of taking control and being responsible in protecting your personal credit.

What Your Credit Report Contains
Your credit report is divided in four sections- your personal identity, credit history, public records and inquiries. When you get a copy of your credit report, take the time to carefully review the details contained under each section.

Pay particular attention to the personal identity, credit history and inquiries sections in your report. Here are the warning signs that should be aware of as these signs may indicate a possible fraud or identity theft.

Inquiries from creditors you did not apply to. Are there records of lenders or companies trying to pull out your credit report without your consent? Are they inquiring about your report when you can’t remember sending an application to them? If so, someone may be trying to open an account with these creditors in your name. Go ahead and call these companies and investigate about these inquiries. Under the law, consumers must first be notified before a creditor can pull out their reports.

Change of your home address or employment address. Typographical errors are common in credit reports. Misspellings, missing numbers or letters must be immediately corrected. However, you should be alarmed if there is a change in your home address or employment address in your credit report. If this is the case, someone may have called up your creditor and asked to change these details. Identity thieves do this so that the lender would mail your billing statements to the new address and prevent you from monitoring your account.

Strange activities in your old accounts. Do you have old accounts that you rarely use? If so, pay attention on these accounts and see if there are any changes or any activity made that you don’t remember.

Strange remarks in your public records section. This section should be empty unless you’ve had tax liens, foreclosure, bankruptcy or any court judgments. If there is remark in this section, you should take immediate action and notify the credit bureau who issued your report.

Past due charges. Are there charges in your credit cards that you don’t even remember spending? If you’ve been paying your credit card bills on time, someone else may be incurring purchases or charges without your consent. Prepare a dispute letter and send it to the creditor involved. If your creditor refuses to take action, send your dispute to the credit bureau. Enclose copies of your payment receipts to your letter and other documents that can support your claim.

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Working Towards Good Credit

bbcred — Mon, 12 May 2008 20:36:32 +0000

You’ve ordered a copy of your credit report and you’ve found several late payments listed under your credit history. These late payments will certainly pull down your credit score. As a result, you may find it difficult to get approved when applying for loans or credit cards. Since creditors often prefer clients with good to excellent credit rating, those with bad credit are often denied or rejected. What can you do when confronted with this challenge? Is there a way to get over bad credit? Let’s discuss positive ways on how you can work towards a good credit standing.

Addressing the Root of the Problem

In order to find the most effective solution to repairing a bad credit history, it’s important to realize the real cause of the problem. Take a closer look at your lifestyle and spending habits. To come up with an objective evaluation, ask yourself the following questions:

What has caused these late payments to your creditors?
Have you been spending more than what your income allows?
Have you been charging too many purchases to your credit card?
Are you having difficulty in paying off your credit card balances in full each month?
Are you in the habit of submitting only the minimum payment to your credit card company?
Do you frequently carry over your balances from month to month?

Many people with a bad credit history may not know it, but submitting late credit card payments can easily put you in a serious debt situation. Not only will you be charged with high rates, you can also get penalized with late fees. In fact, your credit card company can increase your interest rates without notice just because of a single late payment. In recent years many credit card companies have adopted the policy of increasing your interest rate as soon as you are late paying any creditor. So one late payment to a creditor can raise ALL your credit card rates.

So, how do you wipe out your late payment history and regain good credit? First of all, make it your goal to pay off all your existing balances. It’s practical to start paying off your high-interest credit cards first as these incur the most expensive charges. You can also use a zero interest balance transfer credit card to help you pay off your credit card debt minus the interest. Some zero interest balance transfer cards give six months or 12 months of introductory period and you can take advantage of this time to get off your credit card debts more easily.

Of course, you also need to make some adjustments with your spending or follow a stricter budget plan so that you can focus on paying off your debts as quickly as you can. More importantly, control the use of your credit cards to avoid incurring new charges to your account.
Make it a point to pay off all your debts to your creditors on time at all times. In case you won’t be able to submit your payment by your due date, contact your creditor in advance to explain your situation. Most creditors would be willing to extend your due date for another 30 days without reporting it as a late payment. Lastly, check your credit report after every six months to make sure that all information contained in it are correct and accurate.

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ABOUT THE AUTHOR

Shelly Evans is a credit analyst for Bad Credit Resources for seven years. This website offers resources that specialize in providing bad credit personal loans and credit cards for bad credit to people with poor credit score.