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October 16th, 2007
What goes into a credit report?
Your credit report is the adult equivalent of an annotated report card from school. You can also think of it as resume that creditors look at when they evaluate your application for a credit card, an auto loan or a home mortgage. The higher your credit score is the more likely you are to be approved for a loan or credit line. More importantly, creditors will offer you premium interest rates if you show them a premium credit score.
How do I obtain a free copy of my credit report?
Advertisements for free access to your credit report can be found everywhere from television commercials to websites to radio advertisements. But the truth is, anyone can get a copy of their credit report from any of the three national credit bureaus for free. Thanks to the passage of the Fair and Accurate Credit Transaction Act, every American consumer is entitled to one free copy of their credit report per year.
Checking your report for errors is part of smart credit management
All you have to do to obtain a free copy of your credit report is ask. The three national credit bureaus are Equifax (1-800-525-6285 or http://www.equifax.com/home/), Experian (1-888-397-3742 or http://www.experian.com/), and Trans Union (1-800-680-7289 or http://www.transunion.com/). Keeping track of your credit report is an important dimension of responsible credit management. From time to time, errors creep into credit reports. It is important for consumers to challenge negative credit they cannot account for in order to make sure that their credit score reflects their true credit history. Don’t let errors on the part of lenders or credit bureaus hurt you chances of obtaining premium rates on the credit lines, personal loans and home mortgages of your choice.
Revolving credit helps boost your credit score—if used wisely
Your credit score is comprised of five separate credit areas. While all are important, some areas are weighed more heavily than others: payment history (accounts for 35% of your total credit score); past-due or outstanding balances (30%); length of credit history (15%); amount of new or recent credit (10%); and different types or diversity of credit (10%). As you can see, the revolving-credit-history impact upon your credit score contributes over a third of your total score.
Many consumes sabotage their chances of credit success by overstretching themselves financially with credit card debt. In order to boost your credit score, a healthy degree of credit card debt is required. Creditors want to see that you can handle or manage debt responsibly. Limit the number of credit cards you own to no less than three and no more than five. Additionally, at the very least keep 30% of each credit line open. And always pay your monthly bills on time. Smart management can lead to huge savings and big results.
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