Credit Report Basics

Almost every day, you’re involved in some type of financial transaction requiring an educated decision. Whether you’re shopping for a mortgage or auto loan, checking the accuracy of your credit report, dealing with debt collectors, or looking for ways to protect your personal financial information, the more you know, the less likely you are to fall victim to a financial scam.  Simple financial knowledge can help you make the best financial decisions.

Credit is much more than a piece of plastic.  Today your credit report and credit scores are used as indicators of not only your credit risk, but as an insight into your financial habits.  Employers, Utilities, and Insurance Companies all request your credit report prior to offering their services to you.  You simply must make certain the information they are requesting is accurate.  The best way to do this is by checking your credit report at least once every year.

The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.   You can order your FREE credit report by clicking on this link www.annualcreditreport.com

When you receive your credit report, you must verify that ALL information is accurate.  Below is a lengthy list of everything that is included in your credit report.  Please review each item for accuracy.  Over 80% of all credit reports contain errors and it’s up to you to make sure the information that denotes YOUR credit worthiness is accurate.  If you do find inaccurate or erroneous information, you can file a dispute with the credit bureau for this information to be corrected and reported accurately.  For more information on credit disputes, please visit http://mcmf.net/MCMF_MishapsLink5.html

Personal Information

  • Your name, spouse’s name, Social Security number, birth date
  • Current and previous addresses
  • Current and previous employers
  • Comes from your past credit applications

Summary

  • An overview of your accounts and credit profile
  • Use to compare information from all three credit bureaus

Account History

  • An account record all of your creditors – credit cards, installment and mortgage loans, and other sources
  • Includes date opened, amount, balance, monthly payment and payment pattern going back several years
  • Shows how much credit you have and how you’ve repaid your debts – on time or past due
  • Includes if you have a payment plan or arrangement with a creditor, if the account was turned over for foreclosure or repossession or if it was in collection
  • Creditors are especially interested in your last 24 months of payment history.  This helps them predict how you will pay in the future.
  • Can stay on your report for up to 7 years 

Public Record Information

  • Bankruptcy, foreclosure, tax liens, monetary judgments, court ordered alimony and child support, garnishment
  • Bankruptcy information can stay on your report for up to 10 years

Inquiry Information

  • Shows who asked for your credit report within the past two years.
  • Pre-approved offers and on-going inquiries from companies that you do business with will not affect your credit score. 
  • Filling out too many credit applications can have harmful effects on your credit score.
  • It’s wise not to have more than six inquiries a year.

Consumer Statement

  • Can attach up to 100 word statement to your report.
  • Can explain a change in your payment history –for example, why you were late making payments.
  • Only mortgage lenders review the consumer statement.

Alert Messages

  • Military alert or fraud alert from being a victim of identity theft.
  • Fraud alert is good for 90 days and can be extended for seven years.
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About jenniferhamby

Jennifer Hamby, Executive Vice President of My Credit My Future, has worked in the financial sector since 1996. She is dedicated to educating consumers on financial education and responsibility. Having worked in Data Facts’ Nashville office since 2007 as an account executive, Hamby realized the need for financial education that was informative, yet easy to understand and attainable. Partnering with both Junior Achievement, and Tennessee Jump$tart, in providing financial education, opened her eyes to the tremendous benefits in providing financial literacy and resources for consumers to aid in making better financial decisions.
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