How to check credit score to ensure correct information.
A credit score is the number that represents the creditworthiness of a person. It is a statistical probability based on credit report information from credit bureaus.
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"Never spend your money before you have it."
- Thomas Jefferson |
Credit provider companies use credit scores to evaluate potential risk and reduce bad debt loss; to choose who gets a loan; determine at what rate; and decide credit limits. Credit scores can now determine prices for insurance. Many employers, too, do a credit check of potential employees to get a sense of their overall trustworthiness.
The information from key areas of your credit report make up your overall credit score. Therefore, it’s advisable to check credit score results often. Your account information, including credit cards, outstanding auto and student loans and mortgages, public records like liens and bankruptcies, inquiries or requests by lenders - are all a part of the scoring system.
The credit score keeps changing as often as your credit information is updated. The credit report usually contains your name, date of birth, identifying information, any known aliases, phone number, your current and previous addresses, current and previous employers, your social security number and marital status.
Your credit report will contain information about how you have managed to handle credit in the past. A complete history of your handling of loans or credit card accounts, along with information about any bankruptcies, tax liens or monetary judgments against you is compiled by the credit reporting agency or credit bureau.
Financial institutions and creditors regularly send information about account-holders, which includes what you owe and how many payments are made on time.
Information is also collected from public records. The agencies sell reports to credit providers, employers, landlords and anyone with a legitimate interest in your credit history. You are required to give written permission, which you do when you sign any detailed application form.
Be advised that your credit report does not contain data about your race or religious preference, your medical history, your personal background and lifestyle, stocks and bonds, personal assets, salary history, checking or savings accounts or political preference, your friends, any criminal record or any other sort of information which is unrelated to credit.
Also, not all credit accounts get listed on every credit report, since every credit grantor does not always report to the same credit bureau. You can verify when you check credit score results.
The credit reporting agencies maintain individual files for each resident of the US, rather than combined files for spouses, so your credit report is separate from that of your spouse. Joint credit accounts will appear on both credit reports and your spouse's name can appear on your credit report, so check credit score data closely.
Inaccurate information can often appear in credit reports. Research indicates that one-fourth of credit reports have serious errors which could result in denial of credit.
Consumers need to periodically check credit score results, especially before applying for a major loan or mortgage. You are entitled to a free copy of your credit report, each year, from each agency. In addition, you are entitled to a free report if you have been denied credit because of something in your credit report.
According to the Fair Credit Reporting Act, credit reporting agencies and creditors have to correctly document accurate information. Therefore, if you find an error when you check credit score results, take immediate steps to correct inaccurate information.
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"A mortgage casts a shadow on the sunniest field."
- Robert Green Ingersoll |
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Debt is NOT your friend. It's not a wonderful "tool" for building wealth. That's a myth.
