Your Credit Report Put in Plain English | Pyramis Company

Your Credit Report Put in Plain English

 

Credit scores are compiled separately by the primary consumer reporting agencies; Equifax, Experian, and Trans Union. These credit reporting bureaus compute scores differently, and base their scores on information that may differ from other bureaus.

Your credit score is a number that reflects the information in your credit report, whether you pay your bills on time, how much you owe creditors, and disparaging information such as liens, bankruptcy and foreclosure. It also includes inquiries into your accounts from employers, landlords, and creditors.

When you apply for a loan or trying to rent, your application includes giving your permission to check your credit and base the decision to lend or rent to you on the information contained in your credit scores.

Once your credit scores are reviewed, you’ll receive information on how to obtain a computer-generated report of the findings, but it won’t have a copy of your entire credit report. It may include key factors that adversely affected your scores. Some examples might include:

  • Too many inquiries in the last 12 months
  • Time since most recent account opening is too short
  • Proportion of loan balances to loan amounts is too high
  • Too many accounts with balances
  • Amount owed on revolving accounts is too high

What if you’re declined for the loan or the ability to rent that home?

Is there anything you can do?  Yes, talk to your lender or the property manager and ask for information on how to obtain a copy of your credit report. For example, you may have innocently done something that resulted in a negative score, such as closing a line of credit. Or, you may not have realized that a late payment would bring your score down as much as it has.

  • Under federal law, you have the right to obtain a free copy of your credit report from each of the national consumer credit reporting agencies once a year. There are several sites where you can go to get your free reports:

What should I look for when I review my credit report?

Make sure that you recognize the accounts and loans on your credit report. Then check that the information on your credit report is correct. If you find information that you believe is not correct, contact the company that issued the account or the credit reporting company that issued the report.

What are the common warning signs for identity theft?

  • Credit card charges that you don’t recognize
  • Calls or letters about things you didn’t buy
  • Bills that arrive on unusual days
  • New credit cards or statements for accounts that you didn’t open
  • Denials of credit for no apparent reason
  • Information on your credit reports you don’t recognize, such as accounts or addresses

If you find an error such as disparaging data that doesn’t belong to you, or an account that shows the wrong balance, simply show the creditor or management company your canceled check, release of lien or other proof that the credit report is wrong.

You’ll also have to correct the information yourself separately with each agency, and it may take a few weeks for the agencies to record the updated information.

And remember, abandoning a debt may seem like a victimless crime, but don’t be deceived – the one it hurts most is you. Being deep in debt can be a scary and overwhelming place, however it’s also the time it’s most important to make a rational choice. You might have considered something extreme, but before you choose to skip a payment, it´s important to explore all your repayment options to avoid the legal actions a lender may take if you fail to repay your debt. While the type of action a lender may take depends largely on the type of debt you carry, the tactics that can be employed against you all carry a significant penalty. In the meantime, paying more than the minimums, paying on time, and making sure that your debt to income is well within your ability to repay all your loans and rent.

 

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