Credit Reports
A credit report is a summery of your financially related information. Lenders use this history to make decisions whether to extend credit to you, how much credit to extend and at percentage what rate to extend that credit. Additionally landlords may access your credit report when you apply for a lease and employers may use it if you apply for a job or even if they are considering you for a promotion. Employers and potential employers need your permission to access your report.

Credit reports contain 4 sets of information:

• Your personal information which comes from credit applications you've filled out. Your name, current and recent addresses, Social Security Number, date of birth, and current and previous employers are included in this data.

• Your credit history. Current and previous credit accounts in your name as well as those where you are an authorized user. credit providers, your payment habits, amounts owed, credit limits are all included. Additionally closed or inactive accounts might stay on your report for 7 to 11 years from the date of their last activity.

• Inquiries by businesses like lenders, landlords, insurers and others requesting your credit report. These inquiries remain on your credit report for as long as two years.

• Public record information such as tax liens, bankruptcies and judgments.

Your credit report is not a static document. It changes over time as your credit and financial habits change. Bankruptcies that are more than 10 years old, charged-off or debts placed for collection that are more than seven years old are no longer shown. On the other hand all new information relevant to your credit report is being updated and added constantly.

There are three credit reporting agencies: Equifax, Experion and TransUnion, All three of these agencies, or credit bureaus as they are also called, collect data about you. They do not share information among themselves. Thus everyone has three credit reports which may or may not contain the same sets of information.

You are entitled to one free report during any 12-month period if any of these situations apply:

• If you're unemployed and intend to apply for employment in the next 60 days
• If you're on public welfare assistance
• If you believe your file contains inaccurate information due to fraud
• You are also entitled to a free report if you have received notice of an adverse decision (such as denial of credit, insurance, or employment) within the past 60 days

If you are not entitled to a free report, you are still entitled to purchase one from each of the three reporting agencies for less than $10 each. You can purchase an Equifax 3-in-1 Credit Report for less than $30. This is highly recommended before making a large credit purchase and periodically ( at least once every three to five years ) to insure that you get the credit that you deserve.

When you receive each report, check it for accuracy. If you see errors, report them immediately. Each reporting agency has their own procedures for correcting errors. Follow them to the letter.

There is no way to eliminate or change accurate information included in your credit report. Beware of scammers who offer to "fix bad credit". Responsible behavior over time is the only way to repair your credit history.

Credit Scores
Your credit score is a calculation using the information in your credit report to "put a number" on your credit worthiness to help creditors determine the chance of a default. The most common score is a FICO® credit score, used by over 70% of the nation's creditors to make financial decisions about consumers. Your score ranges from 300 to 850, but the majority of scores fall within the 600s and 700s. Higher scores indicate a lower credit risk. For a score to be calculated, your credit report must contain at least one account that has been open for six months or more, and at least one account that has been updated in the past six months. As your data changes at the credit reporting agency, so will any new score based on your credit report. So your FICO® score from a month ago is probably not the same score a lender would get from the credit reporting agency today.

These items effect your credit score:

• Your payment history. Any record of late payments will lower your credit score.

• Adverse public records. Bankruptcies, judgments against you and collections will lower your credit score.

• Amount owed. Owing an amount to close to your credit limit or owing large amounts will lower your credit score.

• Number of accounts. Too many open accounts can lower your credit score.

• Number of inquiries. Too many recent inquiries can lower your credit score.

• New accounts. Too many new accounts can lower your credit score.

• Length of credit history. A longer credit history, providing the data is positive, is better.

Improving your credit score
Improving your credit score takes a combination of time and stable credit management. There is no quick prescription to make your credit score better. Here are the things to do to help over time.

• Check your credit reports for accuracy. Report any errors immediately. You can purchase an Equifax 3-in-1 Credit Report for less than $30. This is highly recommended before making a large credit purchase and periodically ( at least once every three to five years ) to insure that you get the credit that you deserve.

• Pay off any collection accounts. Negative information will stay with you for up to seven years.

• Pay your bills as or before they are due. Bring all overdue accounts current.

• Keep only a minimum amount of credit cards. Note: closing existing unused credit card accounts will not help you in the short run since the account will still appear on your credit report, but in the long run it will help.

• Keep credit card balances low.

• Pay down debt.

• Do not move debt from account to account. This shows lack of stability.

• Open new credit accounts only when they are necessary, not to increase your available credit.

Our Assessment
Consumers should review each of their credit reports prior to applying for credit, employment, services and leases to insure that they will not be turned down or required to pay higher interest rates due to incorrect information. Consumers should also responsibly manage their credit to insure that they have a good credit score.