Quick Credit Check-Up

quick check-up with reference to tools

What is a credit report? It is a history report listing all of your financial obligations. It is a history of your credit transactions and your behavior on repaying your obligations in a timely manner.

Banks, lenders, and even many employers use your credit report to approve you for a loan and in many case, employment.

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Tell Me About My Credit Report

The credit report is a history of your activity in repaying debt obligations.

Banks, lenders, and even many employers use the credit report to approve you for a loan and in many case, employment.

Your credit report shows a history of your credit transactions and your behavior on repaying your obligations in a timely manner.

Understand what's in your report and what gets recorded:
see our credit report summary sheet in our tool set

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What is a Credit Score

The credit score is a mathematical calculation the measures your capacity to repay a loan.

Lenders often use the credit score when reviewing an applicant's request for credit.

An applicant with a high score will likely receive instant approval with better than normal rates and terms — which means lower cost when borrowing money.

See the ranges of credit scores:
view credit score summary list in our tool set

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Checking Your Credit Report

Why check your credit report:

You need to check it for accuracy. A tarnished credit report can lower your credit score. That can cost you money and career opportunities.

Identity theft if another reason why you should check your report regularly. Identity theft occurs when someone assumes your name and social security number to open credit accounts, divert card statements to another address, and drive up debts.

Identity theft can destroy your credit and trap you into a complicated process to clear your good name and background.

Federal law now requires reporting agencies to provide FREE of charge your credit report on an annual basis. However, you might consider credit monitoring services to detect fraudulent activity to your account.

We have a complete "checking your credit" module:
credit report services and monitoring

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Understanding My Debt Ratio

Lenders use a ratio between your income and debt obligations to approve or decline credit requests.

The debt ratio is the amount of monthly loan obligations that you have as compared by your monthly income. Example:

If your monthly income is $4,000 per month and your monthly debt obligations is $1,200, your debt-to-income ratio is 30% ($1200/$4000).

Debt obligations include mortgage or rent payments, auto loan payments, loan payments, credit card payments, alimony, and other payment obligations.

Lenders like to see debt ratios of 36% or below. A debt ratio above 36% places you in a high risk area where some lenders will decline your credit application or charge you more interest.

Calculate your own debt and income ratios:
link to debt ratio calculation

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Building Credit for the First Time

If you are new to the credit game,

such as a recent HS graduate or divorcée, it is important that you establish good credit habits at the beginning of your credit-use life.

Good credit habits will help when you need to buy a home, apply for a key career position, start your own business, and manage your finances.


There are three criteria that establishes good credit (commonly referred to as the "three Cs":

  1. Character:
    the measurement of your "willingness" to repay the debt (measured by your past credit experiences, length of employment, length of residence, etc.)
  2. Capacity:
    the measurement of your "ability" to repay the debt (measured by your employment, income, current outstanding debts, monthly expenses, etc.).
  3. Collateral:
    the measurement of available "resources" that the lender can assume in the event that you fail to repay the debt (savings, property or investment).

    We have a more detailed discussion on each:
    go to building your credit

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Maintaining Good Credit

Good credit management means successfully managing your credit by paying your debt obligation on time and for the required amount.

How you handle your debt obligations are reported by your lender to credit agencies, who keep a history of all of your credit and loan transactions.

Any time that you fail to make a payment on time may be reported to the credit agencies. Example:

  • If you fail to make payment on your credit card or loan within 30 days of the payment due date, your lender may report this to the credit agencies as a 30-day late payment.
  • Your credit report will then show "1x30", which means that you have failed to make payments "1 time" in thirty days.
  • If you continue to delay payment past 60 days from the due date, your credit report may show "1x60", which means that you have failed to make payments "1 time" in sixty days.


Your credit information is maintained for other parties to review when you make an application for a loan, apply for insurance, and in some cases, seek employment.

Some lenders may not approve your application for credit if your report has any "1X60" or greater on your report. Other lenders may not give your the best interest rate if your report shows any "1x30".

Likewise, employers who see more than 3x30, or 2x60, etc., on your credit report may consider you at risk since your credit history shows that you fail to meet your credit obligations.

That is why maintaining a strong credit report is extremely important.

We have more information maintaining good credit:
click for credit management tips

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Repairing Your Credit

Your first step is getting a copy of your credit report from all three credit agencies

  • Check each one thoroughly for notations made to the report that has damaged your credit:
    click to obtain a copy of your report
  • The most likely areas that you should investigate:

    — late payments
    — collections
    — incorrect marital status
    — incorrect account histories
    — closed accounts incorrectly listed as open
    — judgments, tax liens, and lawsuits
    — credit histories of someone with the same name or SSN,
    — other
  • You need to check your report accurately and take corrective action where needed to remove or clean up negative assessments. You have the right to dispute any remark on your report that you believe may be inaccurate or incomplete.

    We have more steps that can help repair your credit:
    link to repairing your credit report

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Managing Your Credit Debts

Basic Rules for Managing Debt

  • Pay on Time:
    Pay your debt obligations on time, every time. Send payments at least 2-3 days before the due date to ensure that your payment arrives on time.
  • Keep Good Records:
    Keep and maintain all records when speaking with your creditor. Note the date and time, the person's name with whom you are speaking with, the issue that you called about, and the recommendation the creditor offered. Request a confirmation or other ID number that proves that you spoke with your creditor.

    These records are important proof in the event you receive non-payment notification with penalty fees and other "account suspension" or "account collection" notices.
  • Avoid Late Payment Charges:
    Fees charged for scheduled payments that are past due. Creditors generally have a 5-10 day grace period beyond the due date before charging late payment fees. But note that creditors are in the business to make money. So many are moving the grace period back.

    View our debt management plans for:

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