free credit report

Credit Report Repair: Step One is Getting Your Report!

by Wendy Black Polisi on October 2, 2009

Would you like to know how to improve your credit score?  The first step to fixing bad credit is to get a copy of your credit report.

The first thing you will probably think to do is google the term “free credit report”. While this seems like a logical thing to do, be careful! Most of the sites that will come up are not free at all. They are sites that will give you a free report but then charge you monthly for “monitoring” of your credit.

Now, these services can be great if you are undertaking a credit report repair campaign, but you need to understand what you are getting. You don’t HAVE to pay to get your credit report!

Under the Federal Fair and Accurate Credit Transactions (FACTA) Act of 2003, Every American is entitled to a free credit report once a year. You can get your report from all three bureaus at once, or stagger your request throughout the year. (Staggering your requests makes sense if your credit is fairly good and you are simply looking for errors.)

The ONLY place to go to get this free report is AnnualCreditReport.com.

I got mine just this week and it is a fairly easy process that can be done online. They don’t even ask for a credit card. The only thing you have to watch out for is not exiting out of your browser as you finish one bureau and go to the next.

(Some of the bureaus will even let your dispute online from this system, though this is not always the preferred method because it doesn’t always provide you with the documentation you will need later.)

The only downside to the free annual credit report system, is that it doesn’t provide you with a credit score. If you are looking to repair your credit report, it may be difficult to track your progress unless you know what your score is.

To get your credit score, you will need to either pay for a one time report with a score or enroll in one of the bureaus credit monitoring services. Credit monitoring services will monitor your credit report and score on a monthly or quarterly basis, and alert you of any changes. Some of them also have modules that will allow you to play “what if “ games with your score and will make recommendations to improve your score.

If your credit is perfect and you don’t plan to apply for credit, you may have no need for such a service. However, if you would like to optimize your score in advance of applying for a major loan or are working on credit repair, these services may be useful.

In need of credit repair?  Stay tuned for strategies you can use to repair your own credit!

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Repair Credit Report : The First Step is Knowing What You are Looking at!

by Wendy Black Polisi on September 26, 2009

Reading a credit report can be difficult for anyone. They come in many different formats, and unless you are used to looking at them, it can be quite overwhelming.

Lenders use the information in your credit report to decide if they are going to give you a loan. Your ability to understand what they are basing their decisions on is a CRITICAL part to taking control of your finances.

There are seven key components to your credit report. They are: personal information, credit summary, public records, credit history, inquiries, creditor information, and your credit score.

Personal Information: This includes your name, social security number, address, previous address and employer. If you have a previous name, such as a maiden name, that will also be included in this section.

Credit Summary: This is an overview of the number off accounts you have, how they are paid and how much credit you currently have available to you.

Public Records and Collection Accounts: This section will include bankruptcies, foreclosures, judgments, liens, garnishments and accounts that have been turned over to collection agencies.

Credit History: This section includes your payment history on your current and past accounts. Your accounts will show as having been paid on time or paid up to 180+ days late. Accounts continue to report for seven years from the date of last activity. Also included in this section is the date that the account was opened, the type of account, the monthly payment, current balance, and credit limit.

Inquiries: Inquires that are made in response to your application for credit will show on your credit report. These are called hard inquires and they will lower your score. Excessive inquires show creditors that you are aggressively seeking credit, which may mean that you are in financial trouble. Additionally, lenders have no way of accurately calculating your debt rations because they can not tell how many accounts you have opened that are not yet reporting to your report. Soft inquires will NOT appear on your credit report and do not hurt your score. These include when you check your own credit and inquires made by employers and insurance companies.

Creditor Information: This section contains the contact information for all creditors that are reporting to your credit bureau. Most lenders will have a phone number in this section, but sometimes this section will only include an address and state “mail only”, meaning you can only contact them via the mail.

Your Credit Score: This is a key part of your credit report, and the single most important factor to lenders. Your credit score is a number that gives lenders an overall picture of your credit risk. It is a number between 340 and 850.

According to Fair Isaac, the median score in the United States is a 723. Having been an underwriter for almost 10 years, I doubt that it is truly this high, but that is what they say!

In reality, anything a 700 or over is good credit score. You will have access to most any type of loan with a credit score this high. There are a few products that may require a truly exceptional score of 760 or more, but for the most part, as long as you have a score in the 700’s, you will have options.

Once you drop below 700, your credit is considered to be fair. (This has not always been the case – a few years back you could do most anything you wanted with a 660 and that was considered a good credit score by most lenders.) If your score is between 620 and 700, you should still be able to qualify for loans, but you will want to look for ways to improve your credit score.

So, what is a poor credit score? When do your options start running out?

There was a time when you could buy a home with a score in the 500’s, but that time has passed. As of March 2009, even FHA requires a minimum score of 620. With the fall of Sub-Prime lenders, anything below a 620 will seriously limit your options. I would consider anything a 620 or under to be a poor credit score.

Understanding the key sections of your credit report is extremely helpful in helping you repair credit report. Let us teach you how to improve your credit score!

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