Credit Reports


First and foremost you must obtain your credit report. According to the Fair Credit Reporting Act of 2003, all credit bureaus are required to provide you with one free credit report per year. To read more about the FCRA click this link: http://www.ftc.gov/os/statutes/fcrajump.shtm . So what are you waiting for, go to www.annualcreditreport.com and obtain your free credit report.

There are three major credit bureaus that you can obtain your credit report from and these are Experian, Trans Union, and Equifax. To contact each of these bureaus:

Equifax
P.O. Box 740241
Atlanta, GA 30374
1-800-685-1111

Experian
PO Box 2002
Allen, TX 75013
1.888.397.3742

Trans Union
PO Box 1000
Chester, PA 19022
1.800.888.4213


How to read & evaluate your credit report


When you receive your credit report for the first time, it can be a very confusing and frustrating ordeal. Don't give up yet. Secure Credit Solutions has put together a detailed breakdown of how to interpret what you're seeing and hopefully this will put it in better understanding for you.

Personal information
First you'll see all of your personal contact information and current and most recent previous employment. There is also a reference code you'll see along with your information and it is used when you're making inquiries on your report.

- Check to make sure all of your information is correct and any employer information is current along with dates you were or are employed. It should be listed by the most current.

Reference #: 007442114-1
Name: John Q. Viewer
Address: 123 NEW START LN.
Anytown AK, 00001
Date of Report: 2007-12-1
DOB:
SSN: 123-45-6789
E: SDS Consulting
123 Riverside dr
Hilldale CA, 91011

Summary
The following section will be a summary which lists all of your current credit accounts and their most recently reported balances and any delinquent or overdue balances.

This section is listed by:

1. Account type: Installment, mortgage, revolving, other, etc)
2. The count: the number of 'account types'
3. Balance: this reports the most current balance
4. Payment: what your current monthly payment reported
5. Closed: how many 'types' have been closed

Just below the listed "Account Type" summary will list any and all Inquires, public records, collection accounts, and current & most recent delinquencies. These are described as follows:

Inquires: this indicates how many times your credit report (CBR) has been requested by lenders, creditors, agencies, employers, landlords, etc. as well as how many credit inquires you have made or attempted to obtain.

Public Records: any listings of bankruptcy, tax liens, judgments, foreclosures, etc.

Collection accounts: shows how many accounts have been turned over to collection agencies

NOTE: This will happen following a 180 day delinquency

Delinquency: how many current accounts are delinquent or derogatory and any that were previously.


ACCT TYPE COUNT BALANCE PAYMENTS CURRENT CLOSED
REAL ESTATE 7 $384,044.00 $3145.99 3 4
INSTALLMENT 7 $24,897.00 $605.33 2 4
REVOLVING 10 $11,546.00 $432.11 7 3

Inquiries Public Record Collection Accts Delinquencies
21 3 1 17


Account Breakdown & Account History


Following the Summary there will be a detailed breakdown of each account that was listed. This is a good analysis of your credit report and will show all of your account activity. What you can expect to see is the name of the lender/creditor, the account number and what type of an account it is.
-just under that comes the more complex information and that lists when the account was open, the high limit, monthly payment, the balance, the status, any amount past due and the date it was last reported.

Open Date: when you opened the account
High limit: also called the "credit limit" or can refer to the highest balance you charged up
Monthly payment: how much you're supposed to pay each month against the balance.
Account balance: the remaining outstanding balance owed
Last reported: when it was last updated by the creditor
Status: indicates if the account is current, past due or closed.
Amount Past Due: total amount past due on all accounts

The last piece of information you'll find listed is the history of the account, and it usually dates back 24 months.

What is listed on this section is the bureau that reported the information, one of the three listed above (Experian, Equifax, Trans Union), the days past due chart which states how many times you were either 30, 60 or 90 days late, and finally the monthly activity indicator which stats the payment history with either a "Check mark" representing as current, or 30, 60, 90, 120, days past due or delinquent.

Account: MBNA/Bank of America
Acct #: N/A
Type: Other
Bureau Open
Date		 High
Limit		 Monthly
Payment		 Acct
Balance		 Last
Reported		 Status Amount
Past Due
Equifax 5.1991 - - - 1.2001 Closed -

Bureau 30 60 90 History Date 24 Month History
Equifax       6-2000  

Comments: Included in Bankruptcy


Decoding Terms


These are the letters and numbers that quickly determine the status & responsibility of the account.
Bureau Codes
U = Undersignated / not designated by the creditor
I = Individual / individual account
J = Joint / Joint account
A = Authorized User / Authorized on someone else's account
S = Shared / Shared joint account
C = Co-maker / Joint responsibility
B = Co-signer / responsible only on default
M = maker / responsible or individual
T =Terminated / Account Closed

I & R Codes
R = Revolving (credit cards)
I = Installment (Home or Auto)
R1/I1 = pays as agreed / never late
R2/I2 = 30 days late
R3/I3 = 60 days late
R4/I4 = 90 days late
R5/I5 = 120 days late
R7/I7 = regular payment under wage garnishment
R8/I8 = Repossession
R9/I9 = Charge off


How a Credit reporting is broken down


Have you ever wondered how your credit score has been determined? Well you're not alone. There are a lot of different things that go into determining your credit score and what affects it. The model they use is called the FICO, created by Fair Isaac & Co. (FICO) and this method is used by all three major credit bureaus and some banks. In order to better improve your credit score or to know how to remain in good standing, more so than just paying your bills on time, there are factors that are taken into consideration. Below is a list of what they look at:

History: this is a broad topic, but what they actually take into account isn't. They look at everything from major derogatory items such as bankruptcy listings, foreclosures collection accounts, etc. Also the obvious payment history and this is primarily because lenders want to see how timely you pay your bills and if you actually do pay your bills. So you can see how important it is to get your payments in on time, even for small revolving credit lines such as credit cards (see paying credit tips).

Outstanding Debt: Another large portion of your credit score (30%) is based upon how much outstanding debt you currently have. Half of that, (15%) is based upon the length of time you've had the credit, and the longer you've had the line of credit the better it is for your credit history as long as you remain in good standing and aren't late on a payment. The lenders see this as how you will be with future credit. The longer you have established credit the better.

Number of Inquires: remember the "inquiries" we listed in the beginning of this section? Well 10% of your credit score is based upon the number of inquiries you have on your report. If you have applied for a lot of credit cards or loans this will be indicated in the report.

Types of Credit: the last 10% is based upon the types of credit that you currently have. If you have a lot of credit cards as opposed to secured loans it will make a difference in your credit score.

Other factors: there are a number of other factors that are taken into account as well; such as how long you've been at your current job, and if you're considered to be a professional (lawyer, doctor, etc.), if you're a home owner and how long you've been there, age (being 50 years or older having the advantage), how many years you've had established credit and what their ratio of credit balances to available income.

Not to be overwhelmed with this information, there are things that you can do in order to improve your FICO score without turning your life upside down.

1. Review and correct any errors you find immediately: when you first review your credit report you want to make sure that everything on there is valid and nothing is out of the ordinary. If there happens to be a line of credit that you either have paid or never filed for, please see our "removing credit from your credit report" section and how to validate your debt if you happen to have an agency contacting you.

2. Keep those old accounts open: We are learning that credit scores are determined by your debt to credit limit, contrary to what used to be thought, it is important to keep your accounts that are zero balance and not used. By closing those accounts, your debt to available credit ratio will be dramatically increased.

3. In line with keeping those old accounts open, Fico scores are in part determined by how long you have had those accounts open and in good standing with the creditors. So remain in good standing at all times and keep in mind that even if you aren't using the line of credit you may be charged an annual fee, so don't be surprised when you receive a bill in the mail for not using it.

4. Keep your balances low, it is best to keep your credit lines down to 25% of the available credit. A good starting point is 75% of what you have the ability to be lent, and 10% on credit cards balances.

5. PAY YOUR BILLS ON TIME!!! We can't stress that enough.

6. Limit the amount of inquires into your credit. The more inquires the more risky you are seen by lenders.