5-Minute Guide to Your Credit Report
Posted on 2016-03-02 08:00:09
Do you avoid looking at your credit report because you think it’s over your head? You could be making a serious mistake. Whether you like it or not, others are using the information in your credit report to make decisions that affect your life, and it’s not just creditors. Landlords, employers, utility companies and insurance companies are among the other businesses that use credit reports day in and day out. Get to know your credit report. The information is organized to make it easy to understand. Here is our 5-minute guide to the four main categories of information on your credit report.
This information is intended to identity you. It includes your full name, your Social Security number, current and previous addresses, your date of birth and sometimes your current and previous employers. Minor discrepancies in this section are not critical unless they could cause you to be mixed up with someone else.
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The heart of your credit report is your credit history. It includes a record of your past and current credit obligations. Your payment history will indicate if you have been late on a payment. Your current balance on each account is usually noted along with the age of each account. You don’t want mistakes in your credit history!
Inquiries are a record of who has looked at your credit report. Hard inquiries result when you initiate a credit application. Too many hard inquiries can have a negative impact on your credit score. Soft inquiries, on the other hand, have absolutely no impact on your credit score. Soft inquiries are only visible to you, and not to anyone else who may view your credit report. Viewing your own credit report is a soft inquiry. Credit checks by your existing creditors are soft inquiries.
Public records include bankruptcies, court judgments and tax liens. Ideally this section of your credit report will be blank. But if it’s not, keep in mind that most negative information must be removed after seven years, though some bankruptcies may stay on your credit report for ten years. The impact of negative items on your credit report will usually lessen as they get older.
Why Accuracy Matters
The information on your credit report is used to calculate your credit score. Some creditors look no further than your credit score to make a yes/no decision about you. Mistakes on your credit report can affect those decisions or can cause you to pay a higher interest rate.
Don’t be intimidated by your credit report. Dig in and check yourcredit report for accuracy. It could save you money.
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