Your Credit Report
Personal Identification Information – name social security number ,addresses, and employment history.
- Public – record information, such as tax liens, bankruptcies, and child support orders.
- Collection activity.
- Information on each credit account that you have, whether it is open or closed.
- A list of inquiries, that is, companies that have requested your credit file.
- You also have the option to include a personal message, and to receive your credit score.
It is a good idea to obtain a copy of your credit report when making major changes in your life, such as making a large purchase (house or car), applying for a job, joining the military, or getting married or divorced.
You are entitled to a free copy of your credit report if:
- You were recently denied credit (within the last 60 days).
- You are currently unemployed and will be seeking employment in the next 60 days.
- You are currently on welfare.
- You are a victim of identity theft (make sure you have reported it to the police).
Paying on time – 35%. Needless to say, the more timely you are, the better your score will be. Missing a payment can potentially lower your score by 50 to 100 points.
- Amount and type of debt – 30%. The goal here is to have a low balance owed compared to the amount of credit you have available. That said, having credit cards with small or no balances improves your credit score.
- The length of time you’ve been using credit – 15%. Accounts that you’ve had at least 2 years will increase your score.
- The variety of accounts – 10%. Riskier types of credit, such as revolving credit or finance company loans lower your score more so than student loans or mortgage loans.
- The number and types of accounts recently opened (in the last 6 months) – 10%. In this case, creditors are concerned that if you apply for many accounts at once, you may not be able to pay them.
You are considered a normal credit risk if:
- You have 11 credit accounts reporting to a credit bureau.
- You have never been more than 30 days late on a payment.
- Carry credit card balances of less than $1000.
- Have access to about $12,000 on all credit cards combined.
- You have a credit history shorter than two years.
- Have credit card balances more than $10,000.
- You’ve had an account closed due to default.
- You have had an account that was at least 90 days overdue.
Examples are younger people with little or no credit, those just arriving to the United States, people who use cash often and rarely use credit, and those who previously had joint credit with a spouse and are newly single.