What's Inside a Credit Report

what you should know

A review how credit reports are used by lenders and others to determine approval rates and terms. Your credit report is used by lenders to check whether you maintain a history of meeting your financing obligations. The stronger your credit report, the better your qualifications for credit and other approvals.

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About Your Credit Score

The FICO score is a mathematical calculation the measures your probability to repay a loan

The score ranges from 300 to 850, with 850 being the highest and most favorable score. Measurements are base upon a number of factors that include:

  • your current outstanding debt
  • places and the number of times you have applied for credit
  • the kind of credit you have taken out in the past
  • late payments in 30, 60, and 90 day increments
  • over extension of your credit lines
  • liens
  • garnishments
  • bankruptcy


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

an applicant with a high FICO score will likely receive instant approval with better than normal rates and terms — which means lower cost when you borrow money

view more information about the FICO credit score


FICO Scores: 720 and up

  • Scores 720 and up are considered great to excellent.
  • Most lenders will categorized this group as A rating.
  • Scores within this group will have access to the best interest rates and terms.


FICO Scores: 640 to 719

  • Scores 640 to 719 are considered good credit.
  • Most lenders will categorized this group as B rating.
  • Scores within this group will have access to good interest rates, but may not qualify for the very best interest rates and terms.


FICO Scores: 500 to 639

  • Scores 500 to 639 are considered risky credit.
  • Most lenders will categorized this group as C rating.
  • Scores within this group may still qualify for a loan, but may have to pay at least two percentage points or more higher interest rates than the group in the excellent category.


FICO Scores: 499 and less

  • Scores 499 and below are considered very risky credit.
  • Most lenders will categorized this group as D rating — which means the applicant may have foreclosure, liens, and credit judgments.
  • Scores within this group may still be eligible for a loan, but may have to pay at the maximized rates determined by State and Federal regulations.


What Determines Your Score

  • Your payment history – about 35% of a FICO score
    Paying your debt obligations on time for the amount required helps your credit score. Late payments, bankruptcies, and other negative items can hurt your credit score.
  • How much you owe – about 30% of a FICO score
    FICO scores look at the amounts you owe on all your accounts, the number of accounts with balances, and how much of your available credit you are using. The more you owe compared to your credit limit, the lower your score will be.
  • Length of your credit history – about 15% of a FICO score
    A longer credit history will increase your score over time. However, you can get a high score with a short credit history if you demonstrate responsible credit management.
  • New credit – about 10% of a FICO score
    If you have recently applied for or opened new credit accounts, your credit score will weigh this fact against the rest of your credit history.

    FICO scores distinguish when you are searching for a new loan based on the length of time when inquiries occur. Shop rates and loans within 20-30 days to avoid lowering your FICO score.
  • Other factors – about 10% of a FICO score
    Several minor factors also can influence your score. For example, having a mix of credit types on your credit report – credit cards, installment loans such as a mortgage or auto loan, and personal lines of credit – is normal for people with longer credit histories and can add slightly to their scores.

    more information about scores: www.myfico.com

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What's Inside the Credit Report

Your credit report will maintain the following information:

  • Your current outstanding debt
  • Places and the number of times you have applied for credit
  • The kind of credit you have taken out in the past
  • Late payments in 30, 60, and 90 day increments
  • Over extension of your credit lines
  • Liens
  • Garnishments
  • Bankruptcy

    Credit bureaus report negative information for seven years and bankruptcy information for ten


Who Has Access

By signed authorization through an application or other contractual agreement, the following parties may gain access to your report:

  • Banks, credit unions, finance companies, other lenders
  • Retailers, department stores, credit card companies.
  • Landlords, utility companies, phone companies.
  • Hospitals, doctors, dentists, insurance companies.
  • Car dealers, mortgagors.
  • Investigators, lawyers, courts.
  • Employers, contracting agreements, individuals who do business with you.
  • Any party who can offer just cause and/or has access as a member of a credit reporting agency.


Why Check Your Report

To avoid paying higher interest rates on your car and home mortgage if your credit report shows some questionable activity.

  • Did you also know that you may be charged higher premiums on insurance if you have questionable credit?
  • And you also might be surprised that many employers run credit checks on potential job applicants and/or for promotions.
  • Your goal is to ensure that your credit report reflects accurately your credit and financial management skills.

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5 Reasons to Check Your Report Regularly

1: Check for Errors and Inaccuracies

About 1-in-4 credit reports contain errors that can affect a credit decision. These errors may include human input error, incorrect information reported about your account, or addition of some other account information that has a similar name or SSN number to yours.

You should check you report at least annually and prior to submitting a home mortgage or other application.


2: Tracking Payments

The typical household will during one month make 1 mortgage payment, 4-5 credit card payments, 1-2 student loan payments, 1-2 auto loan payments, 4-5 utility payments, and the list goes on.

Multiply this number of payments by 12 and you can imagine the probability that 1 or more payments were recorded incorrectly by your creditor.

You should check your credit report to make sure that your payments has been properly recorded.


3: Identity Theft

This is probably the main 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.

Checking your credit report regularly can help prevent identity theft. It shows credit activity being made in your name. You can monitor over time whether a particular inquiry or credit account was open without your authorization.


4: Inquiries

Every time you make a request for credit or enter into some contractual service, your lender or service provider may check your credit, which places an inquiry on your credit report. Multiple inquiries over a short period of time can lower your credit rating.

Your credit report will show the inquiries made to your report. It is important to know who has made an inquiry, whether such inquiry was authorized by you, and most importantly, whether any of the inquiries are related to Identity Theft.


5: Credit Fraud — Unauthorized Charges

A credit report will show the credit accounts that are still open but with limited or zero activity.

if someone confiscated your credit account, how would you note any activity to the account if the creditor has on their records your previous address? Reviewing your credit report allows you to catch new activity on accounts that may be fraudulent.

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Making Credit Repairs

Get copies of your credit report from all three credit bureaus.

You may connect to each credit reporting agency individually, or get your 3-in-1 report. It is important to review all three. Some creditors may only report to 1 or all 3 major credit agencies.

check your credit report


Review each report for inaccuracies and negative items that do not correctly reflect your credit position.

Look for collection accounts:

— Equifax lists them at the end of the report
— Trans Union mixes them throughout the report.
— Experian gives a brief explanation of all accounts.

If you don't recognize any the accounts, don't assume they are yours.

Note: retain the services of a professional legal team to handle all credit repair issues.


Dispute all inaccuracies and negative items in your report.

You can file a dispute online with the individual credit agency. Note that you must file individual disputes with each credit agency if the inaccuracy is found on all three agency reports:




Note: retain the services of a professional legal team to handle all credit repair issues.


After you remove all inaccuracies, your next task is to remove negative items that affect your score; most notably delinquent and non-payment accounts.

Contact each individual creditor (or collection company) to negotiate a manageable repayment plan. Explain your financial situation.

Some companies will drop the interest, forgive part of the loan, or offer extended terms that allow you to make reasonable repayments.

Your last resort is to pay the entire outstanding balance in full.

  • Request a written agreement that that the creditor will remove the bad rating on your credit report if you meet the terms of their repayment plan.
  • Make sure you live up to your agreement. The last thing you want is to fall behind on your repayments.


If you meet the repayment agreement under Step4, the creditor will delete the negative account and change it to a positive rating.

Make sure you review your report for that change. You should have in your possession the creditor's agreement to correct the credit report. Contact the creditor is there is an error.

Keeping Your Credit Report Clean

Make it a habit to check your report regularly to protect yourself from credit abuse and fraud.

You may consider credit monitoring and protection services to watch and protect your credit report.

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