Credit Report Score
Credit Reports, How You’re Being Scored, and Why it Matters
Your credit report is a compilation of data that is gathered and updated regularly by credit reporting agencies or “credit bureaus.” Credit reporting agencies sell this information to lenders and other companies and organizations to help them determine how you manage credit before lending, insuring, or even hiring you. Checking your report also helps protect you from fraud, inaccurate reporting, and identify theft.
NFCC Certified Credit Counselors will provide you with a complete overview and understanding of what’s on your credit report, and give you feedback and guidance on ways to improve your credit worthiness. Obtaining counseling has no negative impact on your credit score and isn’t reported to the credit bureau.
After completing a credit report review session you will have:
- A full understanding of how to interpret the information found on your credit report.
- An understanding of how your credit score is used
- Suggestions on how to use credit wisely to ensure your credit remains up-to-date.
How a Credit Score is Determined
Most lenders use a mathematical formula to generate a “score” to help them determine if you are a good credit risk. The most frequently used version is the FICO® Score created by Fair Isaac and Company. A FICO® Score is a snapshot of your credit risk picture at a particular point in time. FICO® Scores range between 300 and 850 with higher values indicating a lower risk to lenders.
What information is included on your credit report?
Identifying Information
Includes your name, date of birth, social security number, current and previous addresses, and phone numbers, to ensure the information is matched to the right person. In addition it helps detect and prevent identity theft/fraud.
Employment History
Record of all the places you’ve worked and the length of time you’ve worked at each position.
Existing Credit History
This includes detailed information about any credit accounts (credit cards, mortgages and loans) you have, including: when each account was opened, your credit limit or loan total, co-signer information, recent account balance, highest account balance, monthly payment, and recent payment.
Closed Accounts
Credit information about closed accounts remain on your credit report for 10 years except for negative accounts, which are removed after 7 years.
Payment History
The MOST important and impactful information is your payment history. It determines 35% of a FICO score and both paid and missed payments stay on the report for seven years.
Public Records
Credit information about closed accounts remain on your credit report for 10 years except for negative accounts, which are removed after 7 years.
Credit Inquiries
List of companies and individuals who requested a copy of the report in the past two years. Inquiries are listed as voluntary or involuntary depending on whether you or someone else requested the inquiry.
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