Your Credit Is Important

Have you tried to buy a home, buy a car, rent an apartment or applied for credit for monthly housing expenses like heating oil, cable and utilities? Have you applied for a new job, tried to get affordable car insurance? Your credit affects many aspects of your life, having a low FICO score may affect your ability to get a job, to get an apartment, to obtain a real estate mortgage, a car loan, personal loan or a credit card. A low credit score can affect the cost of your car insurance, your ability to obtain services and the rates your pay on loans. Many employers, landlords, utility companies, insurance companies and lenders require a credit report as part of their evaluation.

The first step to understanding your credit, is to obtain a free copy of your report from the three major reporting agencies; Experian, Equifax and Transunion. All consumers are entitled to a free credit report, every 12 months, from each of the major bureaus. The Federal Trade Commission is a valuable website with information on obtaining your free credit report and your rights through the Fair Credit Reporting Act (FCRA). You can obtain your credit report more than once a year; if you receive an adverse action from a company, you can request a copy of your report within 60 days of that adverse action notice or if you are unemployed and plan to look for a job within 60 days, you also have the right to request a report. There are three ways to obtain your report, you can apply through the internet, through the mail or by phone. There is an additional fee to obtain your credit score from each of the reporting agencies.

A credit report has your name and all names you have used, your date of birth, social security number and address history. Your report will show the creditors who have reported to the bureau in the last 7 to 10 years. Each creditor will display a portion or your complete account number, when the account was opened, when it last reported activity, how many months are reported and how many times late over 30 days, 60 days and 90 days. It will also show the dates of late payments and will advise the current status of the account.

Credit scores are calculated by evaluating payment history on a consumer’s mortgage, revolving credit card debt and reviewing installment debt; these are the three major types of credit that a consumer may or may not have. The items that most adversely affect your credit score are late payments, collections, charge offs, negative public records, number of credit inquiries, high credit card balances (anything over 30{919468b76a1b111b1791bdf3e51426d8562c963af300c016649515c15309dd6c} of the available balance) and late payments. Your report will show public records, which include bankruptcies, tax liens and judgments.

If you find adverse or inaccurate items on your credit report, research how to correct these items; resolve and pay old medical bills with a deletion, payoff and/or settle old charge offs and collections, make sure all public records have been released and review all negative items that may be impacting your credit score. Most credit agencies keep your information for 7 to 10 years from the date of last activity. Consult with an expert when paying off or settling old accounts, sometimes paying old debts will affect your score adversely; especially accounts that have had no activity on them for several months or years. Ignoring credit problems won’t make them go away; educate yourself on how to settle debts for less, how to get a deletion, how to get a credit card company to re-age an account to delete late payments. Work aggressively with the creditors and the three major credit bureaus to restore your credit score.

Take your time to repair your credit and keep good written records, in the event that you have a future dispute. Consult with a professional if your situation is too complicated to handle on your own. You can do anything a credit consultant can do, just take it one creditor at a time. Your credit score does matter and it is important to your financial future.

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