Posted on Friday, 25th December 2009 by Admin
Credit Tip! Many credit card companies will decide whether or not to issue you a credit card with a high limit based on your credit report. If in doubt they may not issue a card at all or issue a card with a very low limit or risk.
Your credit report can be one of the most important pieces of information when it comes to your financial health. It is important that you have an understanding of all that it contains and how it relates to future credit you may apply for.
Your credit report says a lot about you
Your credit report tells a lender what kind of borrower you are. It tracks late payments, collection requests, and bankruptcies. It also tracks on time payments, loans that are paid off, and accounts that are opened and closed. It is your history and it can affect your future.
Too much credit can hurt you
It seems silly, but having too many credit card accounts on your credit report can actually hurt you even if you have no late payments and carry a low balance. Lenders worry that because you have the ability to run up high credit card bills, you might accrue a large debt and be unable to pay them back because you have other bills to pay. If you have credit cards in your wallet that you seldom use, close the accounts. Instead of carrying three gas credit cards, trim down to one, or put your gas purchases on a general use credit card.
Credit Tip! Also if you have been denied credit on the basis of information in a credit report, you are entitled to a free copy of your credit report from the credit bureau that supplied the credit report.
What you don’t know can hurt you
Credit reports contain a lot of information about you and with the volume of information they are compiling, it is possible that it contains some mistakes. Perhaps you have closed an account that your credit report states is open or you have paid off a balance that is still listed. Whatever the discrepancy, if you notice an inaccuracy on your credit report, it is up to you to contact the credit bureau and get it corrected.
What you don’t do can hurt you
Missing credit card payments costs you more than just late fees. Having late payments reported on your credit report can keep you from getting a home loan or even buying a car and once accurate negative information is on your credit report it takes 7 years to get it erased. It is important to make your payments and make them on time and to carefully consider every purchase you place on a credit card.
Credit Tip! Send your letter by certified mail, return receipt requested so you can document what the credit reporting agency received. Make sure your letter is dated, and don’t forget to keep copies of everything you send.
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