Understanding Credit Report Score

Understanding credit report score calculations involves understanding what is actually contained in your credit report. If you know what is actually contained in a credit report, then you will be in a better position to fix your credit score A credit report is split into sections that contain:

PERSONAL DETAILS

• Your personal details that are intended to uniquely identify you, so that there can be no doubt as to your identity, or of you being confused with somebody of the same or a similar name residing in the same neighborhood, or even at the same address. It has been known for two people with the same name to be living in the same apartment block, and this type of information is essential for those that find difficulty in understanding credit report score information.

  This section can contain all or some of the following information:

  • Your name
  
  
  • Your age and other details such as gender.
  
  
  • Your Current address and also previous addresses – you cannot escape a bad credit record by changing address.
  
  
  • Your Social Security number.
  
  
  • Employment and employers name and address.
  
  
  • Spouse’s name and number of children residing at the address.
  • Driver’s license number and possibly even telephone numbers: Home, Employment and Cell Phone.

• You should check all the details in this section of your report, since you might find different spellings of your name, or even that you are recorded as having resided at previous addresses that you know nothing about. This can be grounds for having your credit report rescinded and altered. Understanding credit report score information is much easier if you can understand all of the facts that go into the melting pot, and one of these could be you having been credited with a false residential address due to some mix-up or another.

CREDIT HISTORY

Your credit history is a record of all the credit you have had during the statutory period allowed for your records to be held. If you understand the factors involved in your credit history, then understanding credit report score information will be a lot easier for you. This can include:

• Name of the Creditor.


• Account number. You could have more than one account number with a specific creditor.


• dated the account was opened, and the amount involved.


• The balance owing on the account, and also possibly the agreed monthly payments.


• The account status: It could be fully paid, still open, inactive, defaulted, etc.


• Your record of payment – generally in terms of months behind, 0 meaning none, 1 meaning one and so on.

Difference credit reference agencies use different ways in which to express your record of payment. Experian for example will make comments such as “Always pays late” . What you want is a good record of payment – all zeros or comment-free.

PUBLIC RECORDS

This is the killer for your credit records. You should now be better at understanding report score information, and should realize that you want this section to be empty. It contains all court cases, bankruptcy and other financially related legal records. If you have a listing here, you definitely need our help.

INQUIRIES

There are two types of inquiry:

• Hard Inquiries: these are ones that you generate by making credit applications. These can be any type of application for credit, ranging from credit card applications to applications for a mortgage or car loan.
• Soft Inquiries: these are inquiries made by your creditors checking out your current credit rating. Some, such as American Express, will use this information to cancel your Amex card even if your payments have never been behind. They are using your credit record as a means of assessing future risk of you defaulting on your payments.

I personally feel that this should be illegal, and that if you keep to your part of the agreement by maintaining your payments on time then so should they.

Other soft inquiries could be credit companies checking out your record so that can offer you a pre-qualified credit card. All you do is agree and the card is yours – if your credit is good! However, inquiries are not a large part of your overall credit score, and it is not true that more inquiries there on your credit report then the lower will be your credit score. They are given very low weighting relative to your credit history, and public record. This sort of knowledge is essential in understanding credit report score results.

Make sure that you check your report carefully because the vast majority has at least one error. Your report should include a form for you to complete with any errors you see. They will not be automatically corrected, since the credit reference agency will have to be convinced that your case is justified. It could take 30 days or more for any change in your credit record to take effect, and you might be asked for further evidence to back up your claim.

One type of claim that can make is to state that you are not financially dependent on anybody living in your home that has a bad record. There is a tendency for an adverse credit report to be applied to everybody living at a particular address, irrespective of the identity of the person involved. You have to state that you are not financially dependent on that person for that not to apply to you. That is not often easy to do which is one reason why you should take professional advice on credit reports.

That advice is generally very expensive, and software such as
CREDIT-AID 2008 can help you to achieve the best credit score that you could possibly get, given all the information that the credit reference agencies have about you.

I highly recommend that you at least try this because it is not easy to convert a bad credit record, and you need all the help you can get. This is recognized as the best credit repair software in the USA, and if you use this software then understanding credit report score calculations will be irrelevant since it will be done for you.