|
The vast majority of people don't realize how the credit score system works - and contrary to popular belief, it can be easy and fast to raise your score! |
Understanding Your Annual Credit Report
Understanding your free annual credit report can be a little difficult to make sense of. To someone that isn’t used to looking at such things it might not make a lot of sense. One thing people know is that they’re annual credit score is important and that the credit report factors into it somehow, but how exactly is a mystery to most and that can be frustrating.
The first thing you should understand is what goes into your annual credit report and who has a say in it. Basically, any creditors or financial institutions you’ve done business with or owed money to, is in this report. For that reason alone, it’s an excellent decision to view this report annually and make sure there are no transactions you don’t recognize showing on the report and take action to correct them right away if there are.
Your annual report and your credit score are used to decide if it’s a good idea to lend you money. The higher the score, the better your chances of a bank giving you a loan. Your score also plays a big role in determining whether or not you can get a credit card. Also, a low score will make it more difficult for you to get a house or apartment or make any big purchases.
If you’ve received your credit report and you don’t really understand what it means, the first thing you need to do with it is verify they have your information correct. Check that your name is spelled right and they have your correct, current, address and phone number. Make sure your social security number is right. Make sure they also have your work information correct and that if there are past employers or addresses, make sure you at one point worked or lived there. If any of that information isn’t right, contact the credit bureau and make sure you have it remedied.
Most of what you’ll see in the actual report itself is account information. The following information will be given for each creditor:
- Name of lender – this would be the business name that collected or tried to collect money from you
- The type of account you had or have with them
- The account number from the account you had or have with them
- The date you opened the account
- The highest dollar balance
- The most recent dollar balance
- Terms of the loan
- Payment history with the lender
- Where the account stands at the time of the report
You’ll also see information if you’ve had any of the following:
- Tax liens
- Judgments in court against you
- Bankruptcy filings
- Repossessions
A very useful section of the annual credit annual report is at the end where you can see who has requested information on you. This will include:
- Credit cards you’ve applied for
- Loans you’ve applied for
- Pre-screen program information which will include any card offers you’ve received in the mail
Go over the entire annual credit report carefully and make note of any account you no longer use. It’s important to contact the company for the account and ensure it is closed immediately. It’s also important to ask for a letter or some sort of documentation showing that you in fact asked to have the account closed and that it has been done.
Get your Free Annual Credit Report HERE