Things You Should Know About Your Credit Report

Things You Should Know About Your Credit Report
When applying for credit or taking out a loan, the first
thing that your creditor will do is to check your credit
report. Based on your credit report, a lender can either
grant you an approval or reject your application. For this
reason, everyone is advised to personally check on their
credit report first before sending out an application to a
prospective lender. This way, rejection and unnecessary
inquiries in your credit report can be avoided.

What factors affect the status of your credit report? Your
credit report is divided into four sections- the identity
information, credit history, public records and inquiries.
Checking the accuracy of the details in your ID information
section is important. One minor error can cause serious
problems or mistaken identity.

Meanwhile, your credit history section is what your lenders
is most interested about. The types of accounts you own,
your debts, your payments, credit limit, and everything
that concerns you and your creditors are listed here.
Naturally, you'll want to check if all the charges that are
billed in your account are correct and if all the payments
you've submitted to your lender are recorded accordingly.

The next part of your credit report is the Public Records
section. You'll want this section to be empty unless
you've filed for bankruptcy once or if you have tax liens
or have been through foreclosure. Obviously, a remark
listed in this section of your credit report will have a
negative impact on your status and your credit score.

Last but not the least, the inquiries section of your
credit report contains information about past and present
lenders who have made an inquiry in your report. If you
frequently submit applications to various lenders and often
get rejected, this will all be reflected in your credit
report. Take note that too many inquiries and rejections
will badly affect your credit score.

Now that you know the factors that make up your credit
report, take the time to review every detail in your
report. In case you've errors, you are free to dispute
about them by sending a dispute letter to the credit bureau
who issued your report and to your creditor as well.
Remember, being aware about the status of your credit
report is your personal obligation and is the best way to
protect yourself from erroneous reporting and fraud.

What if you found out that your credit score isn't enough
to get an approval from a lender? Do not lose hope. You
can still work out on improving your credit score by paying
your unpaid debts and keeping up with your payments to your
present creditors. By being timely in submitting your
payments, significantly reducing the amount owed, and
staying within your credit limit, you can be assured that
your credit score will improve. So instead of rushing in
submitting your credit card or your loan application, take
a moment to review your credit report and see if you are in
the right position to apply for new credit.

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Liz Roberts is a credit analyst and a writer for 8 years.
She has been participating in the programs of NHBS, Inc
such as their continuous effort in giving out Free Credit
Repair and Building Ebook. NHBS also has a list of
recommended bad credit credit cards.
Copyright 2008.
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