Car Loan Tips
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How To Read Your Credit Report
   
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When To Get An Auto Refinance Loan
Auto Refinance
You have probably heard of auto refinance before. Or simply
refinance. The term "refinance" .....
Auto Refinance
You have probably heard of auto refinance before. Or simply
refinance. The term "refinance" .....
Once you've received a copy of your credit report, you'll need
to know how to read it. The first thing you'll notice is a bunch
of confusing numbers, terms and abbreviations.
Examples of these are - Trade lines, account review inquiries
and charge-offs, etc. So where do you begin to make sense of it
all?
We suggest you begin by requesting a copy of your credit report
from each of the three major credit reporting agencies in the
USA, and analyze them as outlined below.
The Big 3 credit reference agencies are - Experian, TransUnion
and Equifax. Due to changes in the Law, once every 12 months you
can print a copy of your credit report held by each of the
credit reporting agencies by going to:
www.annualcreditreport.com.
Don't forget, this is a free service and in accordance with the
law, once a year you are entitled to read a copy of your credit
report online from each of the major credit bureau at
www.annualcreditreport.com. Visit the following link to learn
more about this free service and h
ow to get your free annual credit report.
Understand, obtaining a copy of your credit report does not tell
you your credit score. This important service provides access
only to your credit file. Importantly, however, this information
is used by creditors in deciding whether or not to extend credit
to consumers. And this is why it's so important you obtain this
information. So be diligent. Get your free credit report once
every year.
Remember too, it's of little value to read only one copy of your
credit report from only one agency. The best thing by far is to
read copies of your report from each of the three agencies. The
What Is Credit?
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reason for this is because each agency may hold differentEver wondered what is credit? Credit is more than just a plastic card you use to buy things - it is your financial trustworthiness. Good credit means that .....
information about you. So now you know!
What to look for in your credit report:
A credit report consists of four sections:
Identifying Information Credit History Public Records Inquiries
IDENTIFYING INFORMATION: Identifying information is information
that identifies you. Examine this carefully and ensure it's
accuracy. For example, look for differences in your Social
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because someone (not you necessarily) reported it that way.
Other information held in your credit report will include:
Your current and previous addresses Date of Birth Telephone
numbers Driver's License numbers Your employer Your spouse's name
CREDIT HISTORY: (Special note: Sometimes individual accounts are
referred to as trade lines.)
Each account will include the name of any creditors with related
account numbers, although, sometimes you may find these are
scrambled for security reasons. You may, of course, have more
than one account with a creditor.
Creditors, too, have more than one kind of account. For example,
if you move elsewhere in the country, the creditor may transfer
your account to another office, and assign a new account number.
This entry also includes:
The date you opened the account:
The kind of credit extended (whether instalment, such as a
mortgage or car loan. Or revolving credit (credit associated
with a department store credit card
Whether the account is in your name or held jointly with another
person, such as your partner
Total amount borrowed, (high) credit limit or highest balance on
the card
How much outstanding is still owed
Fixed monthly payments or minimum monthly amount
Status of the account (whether open, inactive, closed, paid,
etc.)
How you've conducted the account: On your Experian report, your
payment history is written in plain English -- "pays on time",
"always pays 30 days late", etc. Other comments may include
"internal collection" (collections department) and "charged-off"
or "in Default.
("Charged-off" means the creditor has given up on collecting the
account and subsequently, written off the debt.)
Other credit agency reports instead use Payment Codes denoting
activity on the account. These range 1 to 9; R1 or I1 on a
credit report is indicative of a good repayment history on a
revolving or instalment account.
PUBLIC RECORDS:
Hopefully, the next section of your credit report will be blank.
The public records section is, without doubt, bad news. If you
have a public record, this indicates previous problems.
The kinds of things we're talking about here are major financial
delinquencies such as bankruptcies, judgments and tax liens.
These problems will ruin your credit report for sure.
INQUIRIES:
The final section is for Inquiries. This section contains a list
of every creditor who has asked to see your credit report.
The thing to note about "inquiries" is that every time a
creditor asks to see your credit report, this will show up as an
inquiry.
From all this activity, you can begin to see why your credit
file is so detailed.
Inquiries are divided into two sections:
"Hard" inquiries - are those initiated whenever you fill out
credit application.
"Soft" inquiries - are those initiated by companies who
pre-qualify you before sending promotional material.
You may have heard rumours that large numbers of inquiries have
a negative impact on your credit score. In fact, this is not as
damning as many would have you believe.
In reality, the vast majority of inquiries are ignored by the
FICO (sounds like "psycho") scoring model.
This is because the FICO model has a lead-in period that ignores
all inquiries within 30 days of a mortgage or car loan approval.
It also counts two or more "hard" inquiries in the same 14-day
period as just one inquiry.
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For example, you could have 20 "hard" inquiries in two weeks and
they will only count as one.
If you find any mistakes in your credit report such as an
account belonging to someone else, or a disputed amount, then
you should fill out the dispute form that comes with the report.
Simply follow the instructions in the Explanatory Notes section.
The process of Disputing an item on your report can take some
time as creditors have 30 days to respond to the discrepancy by
the credit reporting agency. And unfortunately, as long there
remains any dispute, that dispute will also show on your credit
report. Established lenders state that it's common for most
reports to have errors. Some estimate that as many as 80 percent
of all credit reports have some kind of error.
See also: How To Fix Your Credit Report.
About the author:
Credit Repair
Guides Free to Fix Bad Credit Scores. This website is
designed to help you find the best information about credit and
credit related issues in the United States. Download our free
Credit How-tos now! Copyright 2005 Andy Ballentine and
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