12 DAYS OF MASTERING CREDIT DAY 4

DAY 4

THE CREDIT REPORT

Today is Day 4 of the 12 Days of Credit Mastering. The big three credit reporting agencies are the equivalent of the Wal-Mart of credit. They house an amalgam of personal information for virtually every consumer in the United States and abroad. They assemble information that might be relevant to prospective lenders and put them together on what’s called a credit report. Below we have detailed the type of information that should be found on a standard credit report.

1. Personal Information

Personal information helps the credit reporting companies to identify you and distinguish you from other borrowers.

·         Name, address, Social Security Number, date of birth

·         Previous addresses

·         Employment history

2. Public Records

The credit reporting companies collect information from court systems. This only includes judgments related to your finances (no traffic tickets, for example).

·         Bankruptcy

·         Tax liens

·         Foreclosure

·         Wage garnishment

3. Inquiries

There are two kinds of inquiries, there are hard pulls and then there are soft pulls. Credit inquires occur when you submit an application for a loan (tax refunds and cash advances will fall into this group), credit card, automobile, etc. These are categorized as hard pulls and can cost you on the average of about 3 credit score points. The other category is soft pulls. These are credit inquiries that can be found on your credit report when current creditors access your credit to make sure your credit is the same as it was when they initially access your credit. When you sign an agreement for your credit card you give them permission to periodically access your credit report anytime that they deem necessary. Finally your credit may have an inquiry on it from a potential employee.

4. Trade Lines

Perhaps the most significant information collected by the credit reporting companies, trade lines are records of your loans. They detail the vital characteristics of each loan. They may go by a variety of names depending on the credit reporting company, but the general characteristics in interest are:

·         Type of loan

·         Creditor name

·         Date opened

·         Date of last activity

·         Loan balance

·         Maximum balance

·         Account status

·         Comments

·         Your liability on the account

·         Amount past due

·         Minimum payment due

·         Amount of your last payment

On Day 2 we talked about the “credit mix” this includes the type of tradeline that appears on your credit. They are mortgages, installment, revolving and other (American Express).  In order to have the best credit score possible you must possess are good mix of these on your credit report.

Not On Credit Reports

The major credit reporting companies do not collect information on the following (At least not directly):

·         Bounced checks

·         Race

·         Ethnicity

·         Sex

·         Political views

·         Income

Some information is kept at the credit reporting companies, but not displayed on your credit reports. Negative items that have been closed out over seven years ago generally fall into this category. The data still exists at the credit reporting company, but is not included in most credit reports. For a free copy of your credit reports go to annualcreditreport.com. For more information on how to clean your credit contact us at 1-888-824-7622 or at The Credit Genius.