What s In A Credit Report
Below is a MRR and PLR article in category Finance -> subcategory Credit.
What's in a Credit Report
Overview
Thanks to a federal law enacted in September 2005, everyone is entitled to one free credit report each year. This allows you to verify that your report is accurate and understand your credit rating. Accessing your free report is as simple as visiting the authorized source, [www.annualcreditreport.com](http://www.annualcreditreport.com).Understanding Your Credit Report
Once you have your report, deciphering the abbreviations, numbers, and codes might seem daunting. The FICO score, developed by the Fair Isaac Corporation, is the most commonly used system for assessing the risk of extending credit to an individual. Credit reports are generally divided into several key sections:1. Identifying Information
This section includes your name, address, and social security number. Verify these details for accuracy. You’ll also find your previous addresses, date of birth, phone number, spouse's name, and employer information listed here.2. Public Records
Ideally, this section should be empty. It includes any bankruptcies or judgments, which can significantly harm your rating and take a long time to repair.3. Credit History
This section, often the most complex, lists every creditor you've engaged with, including closed accounts, open accounts without balances, and active accounts. Different agencies display this information differently. For example, Experian's report uses straightforward language like "pays on time," while others may use numerical codes requiring a reference guide.Ensure each creditor’s report is accurate. If you have old accounts or loans marked as revolving credit, contact the respective companies to close these accounts completely. Otherwise, they might count against your debt-to-income ratio by appearing as available credit.
4. Inquiries
This part lists everyone who has accessed your report. It includes both credit requests and soft inquiries, such as promotional offers. Soft inquiries do not impact your credit score.Additional Access
If you've been denied credit, you can request a copy of your credit report. Errors may be the reason for denial, so it's crucial to review your report for accuracy.Final Tips
Review your report thoroughly and address any discrepancies immediately. Close any unused accounts that appear open. A clear understanding of your credit report can be invaluable if you're considering a mortgage, new vehicle, or other loan.By keeping your report accurate and up-to-date, you position yourself better for future credit opportunities.
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