Ball Till You Fall

How Much Do You Know About Your Personal Credit Report?

September 26th, 2008 at 01:17am Under Credit

You perhaps know only too well that the information which is contained in your credit report is used by the loan and credit card companies when determining whether or not to extend credit to you, but do you know what is actually in your credit report? For example, did you know that the details that are contained in your personal credit report could influence whether or not you are able to buy that new home or are going to need to continue to live in your present ’shoebox’?

A lot ofIn a lot of cases people believe that when a lender looks at your credit report they are just looking at your credit score and, although this is certainly one thing that they do look at, they are also looking at a great deal more. Most especially, they are looking to see how much debt you have compared to your income and even relatively small accounts, like those with a mail order catalogue company, will be considered as a deduction from your income when when it comes to considering a loan application.

If a lender sees that you have got less money coming in than you have going out then your loan request will undoubtedly be turned down. Actually, by law a specified percentage of your income has to be available to meet the payments on a loan before the lender is allowed to approve it, whatever the purpose of the loan.

A lender will also be looking at your credit history over the past seven years to see how well you have managed loans in existence during that period. In particular, they will look to see if you have made your payments on time and will take note of any payments which you made more than thirty days late. It might not have seemed especially important to you when you got into difficulty and were late with your payments for several months on an account, but any lender is certainly going to take this into account when determining the risk of lending to you now.

A lender will also look to see if any of your accounts have run into debt over the past seven years and whether these debts have now been cleared. If there are payments outstanding on a current agreement credit card companies and other lenders will be very wary when it comes to giving you additional credit before these are paid off.

Finally, your personal credit report will show if you have filed for personal bankruptcy, generally within the previous ten years. Some people think that a lender is far more likely to lend to you if you have filed for bankruptcy because they enjoy the added protection of knowing that you are not allowed to file again for a number of years. However, this is not the case and filing for bankruptcy is viewed by lenders as a red warning flag indicating that you have already demonstrated a tendency to get yourself in over your head when managing your finances.

Your personal credit report is an extremely important document which you ought not only to understand but which you should review from time to time for your own protection. Happily, the law requires that you be provided with a copy of your credit report once a year upon request and the first thing you ought to acquaint yourself with is how to obtain your free annual credit report. Once you have got your report you then need to look through it with care to make sure that it is accurate and then to request that it be amended if it is not. Also, there are certain instances in which you can request alterations to your personal credit report, even when it is accurate, and here you will have to have the answers to hand for such questions as how can I remove a judgment form my credit report?

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Understanding Your Credit Score Information And How It Is Calculated

September 21st, 2008 at 01:00am Under Uncategorized

Credit score information is what your lender will use to judge your application, they use it to evaluate the risk of giving you credit. As you must already know, credit institutions are a business and are only interest in making a profit in lending there money. They look to only lend money to responsible people with a good track record of repayments.

Lenders assess each application by checking applicant’s credit score. By doing this they are able to determine if your application is worth the risk. Your credit score is made from your past credit activities as well as other information in your credit file.

There are many different factors that come into play when a credit score is calculated, a predetermined formula is used by credit reporting agencies to come up with your credit score. This formula will take in to account all the information that is available to them in a credit report, then is used by credit reporting agencies to come up with your credit score

You must at least have one account for at least six months, that has been regularly use and updated, in order for this score to be calculated. This will ensure that you will have enough recent information in the credit report, from which they will base their calculations.

Any previous payment history will account for 35 percent your credit score. This will also include any one time payments you have made. Any records in your credit score of late payments, bankruptcies, lawsuits, etc, will have a detrimental effect on your credit score.

The amount of credit that you have applied for in other past, will account for about 30 percent of your credit score. Not only will the total amount you have borrowed be calculated, also the amount you have borrowed from different accounts will be as well. For example if you maintain a small balance in your accounts, then this will have a positive effect on the credit report.

The length of any credit history you have accounts for 15 percent of your credit score. The oldest account and the average age of your other accounts, will be considered as well. Another thing that will be considered, is the length of time that has passed since you have used certain accounts.

The number of deposits you have made will have made account for about 10 percent of your credit score. Any previous loan or credit applications will also be taken into account.

Credit card debts as well as installment credit as in, personal loans and mortgages are taken into account when calculating for your credit score.

The formulas used by the different credit reporting agencies vary, when calculating for your credit score. But more or less, this is how the above information is used all the credit reporting agencies, to come up with a viable credit score to assess your credit risk.

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