A credit report is a comprehensive summary of a person’s credit. It is often used as the deciding factor in whether or not you will receive the loans or credit cards for which you apply. They can also be used as part of a background check for a job or when you're trying to rent an apartment.
The first thing you’ll find is your identifying information. This includes your name, address, social security number, and employment information.
You’ll also find the lines of credit that you currently have, how much you owe, when the line was opened, credit limits, and more.
Every time you apply for a new line of credit, such as a credit card, mortgage, or car loan; a hard inquiry takes place on your credit. These inquiries will show up on your credit report and will usually knock your credit score down a few points. These inquiries will fall off over time.
Items like late payments, foreclosures, and tax liens can remain on your record for 7 years while bankruptcies will remain for up to 10 years.
Accounts like savings and checking aren’t included in your credit report. It also doesn’t include personal information about your race, medical history, religion, etc.
The first thing you should do with any credit report is to make sure all of the information is correct. If you are working on calculating your net worth, this is also a great resource. This document can also be used when it comes to debt elimination since you have all of your debts in one convenient place.
If you find something on your credit report that doesn’t belong there, such as an inquiry you didn’t authorize or a line of credit you didn’t open, you will need to file a dispute. You can find more about reporting credit fraud HERE.
There are three companies from which you can request a credit report: TransUnion, Equifax, and Experian. Under federal law, you can order a new copy every 12 months from each company for free. What is usually recommended is to request one every four months so you can review your credit at least three times a year.
If you don't have enough (or any) credit, you may be classified as 'unscorable' or 'invisible'. If you want to start building credit, joining a credit union is great way to start. Cyprus Credit Union offers a Visa Platinum starter card which can help you establish a positive credit history. We are also able to work with you and create loans that work for you and your financial situation. If you are interested in opening an account with us, you can stop by one of our 18 branches or check out our website. All you need is $5 to open a savings account.
You must gain control over your money or the lack of it will forever control you.
- Dave Ramsey
Come back next month for a new money work-out to help get your finances in shape this year and check out our previous posts: