The Objective Of Credit Reports And Scores And How They Can Influence You

By Royce Foster

The primary step to credit repair is to always acquire a current copy of all three of the foremost credit reporting bureaus credit reports. You are permitted one free report each year from every reporting bureau or you can also get one that comprises all three credit reports for a fee.

Credit reports are an account of your financial life. They show how you have handled credit and your money in the past. Lenders use them to decide if you are able to meet the standards they have set for loaning money. While credit reports are broadly used, the fact is that it has been reported that as many as 75% of all reports contain discrepancies and incorrect information.

Credit bureaus are only in the business of collecting and compiling information. They do not make any efforts to resolve if the information is correct and accurate because that is immaterial to them. They can sell your credit report whether the information on it is truthful or not. The only person who is concerned about untrue information appearing on a credit report is the consumer.

Because there were so many errors showing up on credit reports, Congress passed a law back in'70 that permitted consumers to dispute untrue information and have it removed. This law is called the Fair Credit Reporting Act and it regulates the accuracy, fairness and equity of credit reporting.

Every credit report contains a numerical appraisal called a credit score. This score takes into account a assortment of factors including the debt to credit ratio, the length of the credit history, and the kind of credit and of course, the full history of payments made, whether they are on time or late.

The most frequent credit score in the United States is the FICO score from the Fair Isaac Corporation. All three of the foremost credit reporting bureaus, Equifax, Experian and TransUnion all use variations of this scoring method. Occasionally you may hear it called the Beacon score or the Emperica score but it is the same thing.

Credit scores take into deliberation numerous unbiased factors such as credit history and debt ratios, but it never takes current income or employment history into account. These two things will likely be a big part of any credit application and a big consideration for the creditors but they are never a part of the credit score.

Credit scores fall within a extensive range of about 400 to 800. A score of 720 or above is thought to be excellent while a score that falls below 600 is considered to be a high credit risk. - 31382

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