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5 Things to Know about Your Credit Report

Updated: Jun 5

Everyone has heard of a credit report. But many people don’t know exactly where to get a copy of their report, or why they should check their report periodically.


What is a credit report and what does it track?


A credit report is basically a track record of your past financial performance. The report shows how much credit you have available, how much you owe, the interest rate(s) and the amount of time you have had the credit. The report also shows how you pay your bills…on-time or late. Financial companies are interested in this information.

The credit report helps a company determine whether or not to give you a loan, mortgage, or credit card. The information in the report helps each company determine what the interest rate will be.


What is considered a good credit score?


Generally, a score of seven hundred or above will afford you the best interest rate and higher credit limit. For home mortgages most banks/lenders will approve a loan if your credit score is at least a 640 and your debt to income ratio isn’t too high.


Who tracks Your financial behavior and determines Your credit score?


The three major bureaus are Experian, Equifax, and TransUnion. Which one should you get it from?

You can get it from just one. But this might not be the smartest option, because the finance companies look at all three when determining your credit worthiness. If you don’t inspect each one, then you risk missing a major mistake.


You have two options: Go to each credit bureau site separately once a year and get the report, or you can get all three at a third-party site. The second option is obviously faster and easier but usually costs money.


Get Your Yearly “Free” Report


Experian

PO Box 2104

Allen, TX 75013

888-397-3742


Equifax

PO Box 740241 Atlanta, GA 30374

800-685-1111


TransUnion

PO Box 1000

Chester, PA 19022

800-916-8800


Knowing What to do with the report


The most important thing is to ensure there aren’t mistakes. If errors are found, you will need to dispute each error with the specific credit bureau doing the reporting. Often times a financial record will be recorded the wrong way by one of the bureaus. This is actually more common than you might think.


Remember, they don’t check with each other to verify everything is correct. So not keeping track of this might prevent you from getting the loan or credit card you want. Know what’s on your report prior to applying for credit. Checking your report periodically helps prevent identity theft.

Since you can track all your financial history, it will be easy to see if there are charges you don’t recognize. The bottom line is, make sure you look carefully at each report to verify everything is correct. This could easily be the difference between getting that loan or not. It will also have a huge impact on the interest rate you pay.


If you haven’t been, maybe now would be a good time to start checking your report annually. Did you learn anything helpful from the above information? Please provide feedback…thank you.

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