May 4th, 2020 10:23 AM by Jackie A. Graves
If you haven’t looked at your credit report in a while, it’s
probably time to go ahead and pull another free one at www.annualcreditreport.com.
This is a site supported by the three main credit repositories, Equifax,
Experian and TransUnion and allows consumers to get a free report once per
year. Consumers are encouraged to retrieve this report primarily to make sure
there are no errors showing up. Unfortunately, credit reports have their fair
share of mistakes.
But it’s really not the fault of these repositories because they
only report what is sent to them by merchants and businesses who issue credit.
When data is forwarded to them, they include it. They’re not going to verify
data on their own each time someone’s payment history is sent to them. They’ll
review it when a consumer sees a mistake and informs them of the offending line
For example, someone with a similar name might show up on your
report and show some late payments which don’t belong to you. That’s the sort
of thing to look out for. You’d be surprised about what all is included in your
report. The property addresses where you’ve lived over the years will appear.
So will any other names you’ve gone by. John Smith, J. Smith, John D. Smith,
John David Smith…you get the idea.
When consumers do view their report, they should look for
mistakes, but they also want some assurances what’s being put out there is
accurate. For those building a strong credit history, it’s important to make
sure these credit agencies are reporting your timely payments. Some of
the data bits being reported are more important than others. What are they?
Surely the addresses of where you’ve lived over the past few
years isn’t that important. At least to you, anyway, right? And of course, any
other surnames you’ve used. If you married John Doe and you’re Jane Smith,
you’ll be recorded as both Jane Smith and Jane Doe. Pretty simple.
Paying on time is the most important factor in your credit
report. So too are account balances. Someone who regularly keeps a balance at
or near the allowable limit will see their scores fall. On the other hand,
keeping a relatively low balance at all times improves scores.
A late payment on a credit card you’ve had for a while won’t hit
your scores very hard as long as the late payment (more than 30 days past the
due date) is relatively isolated. But a late payment on a mortgage will count
more against you compared to a late credit card payment. A bankruptcy or a
foreclosure is the most damaging to a credit report, although the damage is
lessened over time. What’s more important on a credit report is what has
happened over the past couple of years, not something that happened say five or
six years ago. Old, bad information will be shown, just largely ignored as long
as current and timely payment patterns are being reported.
When applying for new credit, an “inquiry” will be entered into
your record. An occasional inquiry for new credit won’t affect your credit but
if there are multiple inquiries for new credit within a specific period, that
will harm your credit. Not as much as a late payment or high balance accounts,
but an impact, nonetheless. Multiple inquiries will carry more weight when
there are other negative marks appearing.
In general, it all goes back to making sure payments aren’t made
more than 30 days past the due date and keeping balances somewhere around
one-third of credit lines. These two are the biggies. When a mortgage company
reviews a credit report and credit scores, if payment history and balances are
kept in check, your credit will be just fine.
Source: To view the original article click here