Help Yourself By Fully Understanding Your Credit Report
By Alexandra Scicchitano
Being able to understand your credit report is important for you to start taking control of your financial health and to eventually becoming financially literate.
A lot of people just think that a credit report is just looking at your credit score and that’s it. However, there is a lot more to it than just the scores on it.
For example, did you know there are multiple credit reports you can get from multiple consumer credit bureaus? The three main bureaus, Equifax, Experian and TransUnion, have similar credit-scoring models to get your credit scores, but they will all most likely be a bit different from each other.
Now you know it is not as simple as just checking credit scores on one report, you have to check multiple and get the average from all of them to get a true understanding of what your score is.
There is a lot more to your credit report like personal information, employer history, consumer statements, account information, public records and credit inquiries. All of these have an impact on your overall financial health.
Personal Information
This is an easy one. On your credit report, it has all of your identifiable information, like name, social security number, date of birth, address and phone number. There’s no better way to know who you are than with that information.
Employer History
Employer history is important because this continues to be used to further identify you. This is also a good place to understand how your finances are through the money you make. Your credit score is going to be lower the less amount of money you make. But that doesn’t mean you can’t take control of it still strive to get to a perfect credit score.
Consumer Statements
Consumer statements are sent by you, the consumer, by giving a short 100-word overview of your disputes or claims on your credit report. Here you can dispute charges or accounts on your credit report. Here you can also explain what happened in your life if you missed payments, and if you were eventually able to get back on track.
Account Information
When people hear account information, many think it means how many bank accounts you have. On the contrary, it means how many mortgages, student loans, car loans, or credit cards you have open in your personal information.
There’s a lot of information that can be showed on this part of your credit report. This shows all of the currently opened accounts you have, and the recently closed accounts. It also shows when they opened or closed, and all the payments you’ve done to those accounts.
This part of the report also shows how you utilize your credit cards to increase your credit score, along with current account balances and loan payments you have.
Public Records
This is also an easy one. This just keeps track of any major financial happenings in your life. Such as if you had to file for bankruptcies or foreclosures or tax lien. This shows big and serious delinquency with your money. These all can have a huge negative impact on your credit score.
Credit Inquiries
When applying for things such as a credit card, loans or the financial institution you went to will review your credit history, this is called hard inquires. How good you are at paying past bills and what loans you’ve been given in the past all have impacts on whether you get that loan you applied for now.
Too many hard inquires can have a bad impact on your credit score, one inquiry brings your score down about five points, but a couple of hard inquires a year is a reasonable amount to have.
Conclusion
All of these parts of your credit report are important. All people who make money and own possession and pay bills should eventually learn and understand why the whole of a credit report is important rather than just the credit score on it.
D.A.L.S. Credit Solutions & Notary wants you to be financially literate about your financial health. Let us help you start on the way to understand your credit report fully.