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Understanding your credit report is not as difficult as most of us make it out to be. Ultimately, if you realize that restoring a good credit rating depends on a clear understanding of your credit report and how it legally works to your advantage, this is the first step toward success.
Here we’ll walk you through the basics of credit reports and help you understand who uses the information in your credit report and what the major components of your credit report are.
who reads this First step, know that credit related parties who want to see your report for your credit history must get your authorization before they can access that information. Essentially, credit related parties include your bank loan creditors and card companies to whom you owe money, insurers or even your potential employers, who are increasingly using credit reports for employment purposes. There are references for Other parties with a vested interest in analyzing your report include the courts as well as debt collection agencies.
What is in it? Key components of your report include personal information, credit history on your outstanding debts, collection reports, public record information, inquiries made on your credit history, and any other additional information. Your credit score is derived from a compilation of all this information, with different weights assigned to each component.
Your report keeps your credit and collections accounts for 7 years from the date of last activity with the original creditor. For Chapter 7 or Chapter 11 bankruptcy, information from the 10 years prior to the filing date and all other courthouse records reported for 7 years from the date it was filed.
What is Your Credit Score Functional scores range from 720 to 850, with the lower the score, the higher the risk to your lenders or potential lenders. This is an acceptable range starting at 720 and any score rating below 620 is considered risky, 620 to 660 unsustainable. Knowing your current credit score is the first step in your credit repair efforts.
Get Your Free Annual Credit Report Now Know that you are entitled to one free credit report annually with each of the major credit reporting bureaus, namely Equifac, TransUnion and Experian. In addition, you are entitled to an update when the credit reporting company makes changes to your report.
In fact, the amount of errors is high because your credit report is a highly liquid document and you need to update your credit details at least on an annual basis.
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