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Online Credit
History
Knowing your credit score
is the first step towards improving your credit, but most people
don’t take this first step. A recent survey by
http://www.bigcreditscore.com
indicated that more than three quarters of the people they surveyed
reported they didn’t know their credit scores within a 200-point
range. Half had never checked their score, and 17% hadn’t checked in
the last few years.
The credit report is divided into four sections; one heading for
identifying information, one for credit history, one for public
records, and one for inquiries. Information under the first heading,
identifying information, is quite straightforward. When you read it,
you might notice that your name is spelled more than one way, and
that there may be more than one Social Security number. That’s okay:
the system is set up to keep any variations. Information under the
second heading, credit history, is pretty straightforward as well,
even though sometimes this section is called a ‘trade line.’ Each
creditor will list your account number, when you opened the account,
the kind of credit you were offered, the total amount of the loan,
how much you owe your minimum monthly payment, and the account’s
status, as well as other information. “Charged-off” means that the
creditor has made efforts to collect, and written them off. The
third section, public records, is best when it’s blank. This is
where the credit report lists the bankruptcies, judgments, and tax
liens that will bring your credit rating crashing down. The fourth
section, inquiries, is a list of everyone who’s asked to see your
credit report.
Is your credit score is a good one or does it need major repair?
Your credit score is the result of a mathematical formula that
combines data from all four sections of the credit report, in order
to suggest the possibility of a borrower falling delinquent in the
next 24 months. Consumer lenders and bankers use your credit score
to estimate the likelihood that you’ll pay your bills on time. As
just an example, a FICO score generally ranges between 300 and 850.
Any score that tops 750 is considered a good credit risk, while a
score below 620 is considered risky. Of course, each lender decides
for their own institution whether or not to lend to people with
scores between thee two numbers. |
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