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Understanding Your Credit Report
By Matt MacDowell
If you have never read your credit report it can be a little difficult to understand
at first glance but the good news is that your credit report gives you all the
information you need to strengthen your credit, where you need to work on
your credit, and exactly where you stand with your credit history.
Understanding your credit history is particularly important when applying for
larger loans, bigger credit lines, or when you want to purchase a big-ticket
item on credit. For example, say that you want to buy a house, which requires
you taking out a mortgage, making monthly payments and keeping up to date
on your bills, understanding ahead of time if your credit is good or if you need
a little work on it will help you take this step in obtaining a loan much easier.
Start looking over your credit report to ensure that your name, address,
employer and your social security number are all correct. This is the first step
in keeping your file correct. Your credit report will also include any names that
you have used in the past, your maiden name, as well as where you have
lived in the last three to five years. Each account that you have obtained under
different names will be listed on your credit report under your social security
number.
As you review your credit card, you will notice the different addresses you
have lived at. if you have had several addresses in just a short time this could
be a key reason why you haven't been able to obtain a credit card or a large
loan recently. Financial institutions want to be able to contact you in regards to
your account, when they feel that you haven't stabilized your life yet and
settled down into a home. Living at one address for at least a year will help
you get a loan.
Reading through the listings on your credit history you will find all the listings
will include any loans and credit cards that you have carried and possibly
even accounts that have been closed by you or the financial institution where
you had obtained the credit card or loan through.
Under these listings, you will see your account numbers, the amount of the
loan that you had taken out or the high limits that you were allowed to use on a
credit card. This is important information for another financial institution to see
because they will know that you have had the opportunity to get money else
where for this amount as well. Beside the credit limit amount you will also see
what your high balances have been. For example, if you had a two thousand
dollar credit limit but you have never charged more than five hundred dollars
to this account this will tell the financial institution that is reviewing your credit
history that you are very careful with your money and you are responsible with
your credit lines.
Look at the credit report a little closer and you will notice if you have ever been
reported as paying late, if you have ever been late, how long your payments
were over due (such as thirty days past due, ninety days and etc), if you have
any accounts which are currently past due you need to bring these accounts
up to date by making a payment on the account and then requesting them to
update your credit history to reflect that you are up to date on your payments.
When you want to take out a larger loan, it is important to find out what your
credit report says about you before applying for the loan. Do this so you can
take advantage of the time you have to fix any late payments, errors on your
credit report and to open a few smaller accounts. If you do not have any credit
history it would be wise to open a few smaller accounts in the process of
building credit before applying for a larger loan.
Building your credit is a life long process and reviewing your credit report at
least once a year will ensure that your credit report reflects each loan and
credit card accurately. Reviewing your credit also keeps you on top of any
problems with identity theft or accounts opened in your name without your
knowledge.
About the Author
Matt MacDowell is an expert in the personal credit building process. Learn the 6 biggest issues that US consumers face today in building a great credit score. Learn more at Credit At Once.
Article Source: http://www.simplysearch4it.com/article/18616.html
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