credit-report

How To Read Your Credit Report

Kurt Clements Real Estate Leave a Comment

You can have your credit run as often as once a quarter and it won’t have any long term effects on your overall score. However, having a copy of your credit report doesn’t do you any good if you don’t know how to read it.

Identification

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Believe it or not, you or the person that runs your credit, may input the wrong information into the report. You will want to double check the borrower’s report. Confirm all of the information here so that you can be sure it is your correct identity.

Credit Score

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The most commonly known subject about credit is the score itself. Although, the score can be deceiving. For example, someone with brand new credit can have a 700+ score after only making a few months worth of payments. However, a lender will see right away that the potential buyer is not qualified to purchase a home since they do not have a long history of on time payments.

Open and On Time Accounts

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Your open accounts will be the ones that are open and have not had any late payment history. Open credit cards, car loans, student loans, mortgages, installment loans, etc. It is important to have 3-4 accounts established with on time payment history on your report.

Derogatory Tradelines

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These accounts are ones that you have missed payments on or possibly have let go completely into collection status with. With some reports accounts that have been late in the past, but are still open will be included in your derogatory section. Be sure to review these accounts closely to see if you owe any debt. Often once you have a collection account it will will be sold to another agency. Before you start saying, ”that isn’t my collection” pick up the phone and call the agency claiming there is a debt against you. Too many collections or late payments can result in you not qualifying to purchase a home. Car loans, large medical bill balances, or large credit card collections often result in an immediate denial from lenders.

Public Records

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These are accounts that have gone through the court system with a result in a judgment, bankruptcy, state or tax lien. You do not want to have any open records in this section of your report. Judgments and tax liens need to be settled and bankruptcies can disqualify you from purchasing a house all together.

Inquiry information

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Check this section out closely so you can see who has pulled your credit. Although the score won’t be changed too much from multiple pulls a year, you want to make sure that no one else is running your credit report without your knowledge.

Creditor Information

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If you believe there is an account on your report that is not yours, then call the creditor and make an inquiry. If the creditor provides you with information proving the account isn’t yours it will be smooth sailing. Otherwise, you can dispute the account.

If you are still confused and want specific details on how to review your own credit report call us at 847-348-8669. We are happy to set up a consultation with you.

 

 

About the Author
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Kurt Clements

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Kurt has developed a unique system designed to turn renters into homeowners. Unlike most Realtors his initial focus is on the financial end of the transaction. This dynamic has allowed him to develop more buyers that were not previously in the market, which in turn leads to more listings being sold. While Kurt is constantly tweaking his programs to meet the needs of his clients, he is ever mindful that a home is not sold without a buyer. More times than not, a buyer that he turned into a homeowner.