Friday, February 04, 2011

Guest Post: Reading Your Credit Report

Experts often stress the importance of maintaining a good credit record, but few of us really understand what goes into the reports. Most people just know that banks use it to evaluate potential borrowers. Everything’s summed up in a single score, but how does it get there? Can you do anything to influence your credit report, as with a credit repair company? This guide shows you a detailed look at credit reports and what they can mean for you.

Credit History
This is the most important part of a credit report, and the part that credit repair companies are most concerned with. Your credit history shows all your past and current obligations, including credit card debt, mortgages, and personal loans. It will also show the date the loan was opened, the payment history (including any late or missed payments), and the amount still owed on the loan. Generally, the lower your total debt compared to your income, the better your credit score will be. Child support and overdrawn accounts may also be listed.

Public Records
This section shows any collection accounts and data from local courts. Foreclosures, Short Sale, bankruptcies, wage attachments, and court judgments all show up in this part of your credit report. Each entry stays on your credit report for a given number of years determined by the state, and cannot be removed by any credit repair techniques. In most states, foreclosures and bankruptcies last seven to ten years, while short sales last five to seven.

Credit Inquiries
Your score may also be affected when a third party pulls up your credit report. Banks usually make inquiries when you approach them for new credit, so inquiries from too many banks in a short time can be suspicious. Your score doesn’t suffer, however, when you pull up the report yourself or when an unauthorized company requests access for informational or promotional purposes. Avoid suspicious inquiries by giving your personal information only to banks or institutions you seriously plan to do business with.

Credit Score
Credit scores range from 350 to 800, with higher scores meaning better creditworthiness. People with higher credit scores are more likely to get approved for loans and get the best rates. Each of the three credit bureaus—TransUnion, Experian, and Equifax—uses a different formula, so it’s normal for credit scores to vary from one credit report to another. A credit repair company can help you correct discrepancies between the three, but only if there are erroneous entries.

About the Author
Author is a professional short sale/ real estate agent who completely have a handle on the Short Sale process and helps people who need short sales, or who want to sell for any reason. He also helps people who are having difficulty but want to keep their home. Visit his website to get more
information about Short Sale.

1 comment:

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