A credit report is a summary of your financial history. It includes personal information and information on all of your credit accounts. Lenders will view your credit report to see how worthy of credit you are. If you go to www.annualcreditreport.comyou are given three free credit reports a year from the three major credit bureaus, Equifax,Experian, and TransUnion. Once you receive your free credit report you must read through it carefully. In this article I will tell you how to properly read your credit report.
The first thing you must do is make sure that all the information on the report is accurate. Go through and make sure your name is spelled correctly, your address is correct, and that all of the accounts belong to you. If you find something is inaccurate on your report you must dispute them immediately. To start the process of disputing inaccurate information go to the websites of all three credit bureaus.
Once at the sites they will guide you through the process.
After you are sure everything is correct on your credit report you must understand what makes up your credit score:
35 % *LATE PAYMENTS* :
The number one thing you can do to improve your credit is pay your bills on time from this day on. Although late payments will stay on your report for seven years the longer the time of your last late payment the better.
30% *DEBT TO CREDIT RATIO*
It is also very important not to max out your credit cards. The more credit you have available that you are not using the better.
15% *LENGTH OF CREDIT HISTORY*
The longer credit history the better so keep old accounts open,even if you are not using them.
10% *NEW CREDIT*
The amount of new credit you were given. If you were recently down credit recently it would not reflect good on your report so do not keep trying to get credit if your report is bad until you figure out how to make it better.
10% *MIX OF CREDIT*
It is good for your credit score if you have a different mix of credit. If you only have credit cards this is not going to be a strong area for your credit. The credit bureaus want to see credit cards,auto loans,car loans ect.
If you do not take the time to understand what makes up your credit report and credit score it will never improve. Once you realize how to read your credit report you can begin to improve your credit yourself. It may take time but it is definitely worth it. Having a good credit score will make your life a lot easier and save you money too!