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Credit Report Q&A
Because you need to know everything about your credit report,=20 capiche?
Q: How do I get my credit score?
A: As of September 2005, = the=20 three nationwide credit agencies (Equifax, Experian, and TransUnion) are required by law to provide free = credit=20 histories to anyone who asks. Once every 12 months, you can order your = report --=20 which will have your score -- at annualcreditreport.com.=20
After finding out your score, make sure everything on the report is = accurate.=20 Do you recognize each account listed? Have you closed accounts that are = still=20 listed as open? Is there negative account information listed that you = believe is=20 inaccurate? Any disputes you have should be documented and sent to both = the=20 creditor and reporting agencies, and be sure to make copies for your own = records.
Q: What credit score will keep me from getting a loan?
A: = Your=20 credit report will also list your FICO score, which is what potential = creditors=20 will look at before giving you a loan. A score above 620 is considered = good. On=20 the other hand, a score lower than 580 will likely give you trouble when = you try=20 to get a loan without a down payment. About 35 percent of your score is = based on=20 your payment history, and any old late payments (that nasty college = phone bill!)=20 will stay on your record for seven years after the original due date = (this date=20 holds even if your debt is transferred to a collection agency).=20
The best way to improve your score is gradually: Make all your = current=20 minimum payments on time, pay any past debts, and keep card balances = down to=20 about 40 percent of your credit limit. Your score improves both as debts = are=20 paid and as negative history falls off your record. But if you see = something on=20 your report that doesn't quite jibe, review the answer to the first=20 question.
Q: Will applying for more credit cards improve my = score?
A: Not=20 necessarily. But it won't hurt your score either as long as you don't = max them=20 out or miss payments. In general, a safe rule is not to apply for more = credit=20 cards than you actually need. In fact, every time you apply for a card, = your=20 score will go down by five points. But if you use it and make your = payments on=20 time, those points will quickly be restored. As long as you keep your = balances=20 low (within 40 percent of your maximum) and make all payments on time, = credit=20 cards can eventually help your score improve.=20
Q: How long do I have before my late payments are = reported?
A:=20 Late payments are usually reported to the credit bureaus within 30 days. = However, it all depends on how often your creditor presents new = information to=20 the credit reporting agencies. Remember: Any late bill is eligible to go = on your=20 record, so unless you make arrangements with your creditor not to submit = it,=20 it'll eventually appear on your report.=20
Q: I have bad credit. Have I ruined our chances of getting a=20 loan?
A: Not necessarily. If worst comes to worst and rocky = credit=20 has turned you into the most unpopular loan-seeker on the block, think = about=20 applying for the loan under your spouse's name only (assuming his or her = credit=20 is in better shape then yours). It's not ideal because, with just one = salary=20 involved, you'll have less-attractive loan options with higher interest = rates.=20 But don't despair: When you've finally whipped your own credit into = shape, you=20 can add your name to the paperwork later.=20
[Nestperts] Rich DiMaggio, author of