What’s On My Credit History Report?
Credit Summary
Your credit summary highlights the information in your credit file that is most important in determining your credit standing by distilling key credit information into one easy-to-read summary.
Accounts
Lenders usually take a positive view of individuals with a range of credit accounts – car loan, credit cards, mortgage, etc. – that have a record of timely payments. However, a high debt to credit ratio on certain types of revolving (credit card) accounts and installment loans will typically have a negative impact.
Account Age
Usually, it is a good idea to keep your oldest credit account open, as a high average account age generally demonstrates stability to lenders. Also, especially if you have been managing credit for a short time, opening many new accounts will lower your average account age and may have a negative impact.
Inquiries – Requests For Your Credit History
Numerous inquiries on your credit file for new credit may cause you to appear risky to lenders, so it is usually better to only seek new credit when you need it. Typically, lenders distinguish between inquiries for a single loan and many new loans in part by the length of time over which the inquiries occur. So, when rate shopping for a load, it’s a good idea to do it within a focused period of time.
Potentially Negative Information
Late payments, collections and public records can have a negative impact on your credit standing. The more severe and recent they are, the more negative the potential impact might be.
Mortgage Accounts
Mortgage accounts include first mortgages, home equity loans, and any other loans secured by real estate you own.
Installment Accounts
Installment accounts are credit accounts in which the amount of the payment and the number of payments are predetermined or fixed, such as a car loan.
Revolving Accounts
Revolving accounts are charge accounts that have a credit limit and require a minimum payment each month, such as most credit cards.
Other Accounts
These are all accounts that do not fall into other categories and can include 30-day accounts such as American Express.
Inquiries
A request for your credit history is called an inquiry. Inquiries remain on your credit report for 12 to 24 months, depending on the type. There are two types of inquires; those that may impact your credit rating and those that do not.
Inquiries that do not impact your credit rating
These inquiries include request from employers, companies making promotional offers and your own requests to check your credit. These inquiries are only viewable by you.
- 12-Month
- Promotional- Only your name an address were given to a credit grantor so they can provide you a firm offer of credit or insurance.
- Annual Review- Periodic reviews of your credit history by one of your creditors.
- Portfolio – A creditor reviewed your account as part of a portfolio they are purchasing.
- 24-Month
- Employment – An employer or potential employer made an inquiry.
- Do Not Display- General inquiries that do not display to credit grantors.
Negative Accounts
Accounts that contain a negative account status. Accounts not paid as agreed generally remain on your credit file for 7 years from the date the account first became past due leading to the current not paid status. Late payment history generally remains on your credit file for 7 years from the date of the late payment.
Collections
A collection is an account that has been turned over to a collection agency by one of your creditors because they believe the account has not been paid as agreed.
Public Records
Public record information includes bankruptcies, liens or judgments and comes from federal, state or county court records.
Personal Information
Information that is added to your file either when creditors enter requests to view your credit history. This includes your name, Social Security Number, birth date, current and previous addresses.
Employment History
Your last reported employer and previous employers.
Alerts
Fraud alert messages notify potential credit grantors to verify your identification before extending credit in your name in case someone is using your information without your consent.
Consumer Statement
A consumer statement is a personal statement that you may add to your credit report. It typically explains why a negative item is listed on your credit report. Creditors or lenders may review the consumer statement and take it into consideration when making their credit decisions. The statement remains on your credit report until you request that it be removed.
Dispute File Information
If you believe that any of the information found on your credit report is incorrect, you can launch an investigation. When you file a dispute, the credit bureau you contact is required to investigate your dispute within 30 days. They will not remove accurate data from your file unless it is outdated or cannot be verified.
A credit score echos credit payment habits over time, with more focus on recent information. You should check your credit report to see a listing of what goes into your credit score.
How To Fix Bad Credit
Pay Your Bills On Time
Paying your bills by the due date is the most important contributor to a good credit score. Past due payments and collections can have a significantly damaging effect on a credit score. Maintain low balances on credit cards along with other “revolving credit.” High outstanding debt can impact a credit score. Apply for and open new credit accounts only when needed. Don’t open accounts only to have a better credit mix. It likely won’t raise your credit score. Pay off debt instead of moving it around from card to card. Additionally, don’t close unused cards as a short-term tactic to improve your credit score. Owing the same amount but having fewer open accounts may lower your credit score.
Minimize Debt
Minimize outstanding debt and avoid overextending yourself Refrain from applying for credit needlessly Applications for credit show up as inquiries on your credit report, indicating to lenders that you may be taking on new debt. It may be to your advantage to use the credit you already have to prove your ongoing ability to manage credit responsibly.
It Takes Time to Improve Credit Scores
If you have unfavorable information on your credit report, such as late payments, a public record item (e.g., bankruptcy) or too many inquiries, you may want to pay your bills and wait. Time is your best friend in improving your credit scores. There is no quick fix for bad credit scores.
How Changes Affect Scores
Understand how specific actions will impact a credit score. Credit scores are based totally on the details identified on an individual’s credit report. Any change to the credit report might impact the individual’s credit score. Simply closing accounts not only lowers the number of open revolving accounts (which generally will improve credit scores), but it also reduces the total amount of available credit. That results in a greater utilization rate, also called the balance-to-limit ratio (which generally lowers scores).
One change actually impacts numerous items on the credit report. It is not possible to offer a completely precise analysis of how one particular action will impact a person’s credit score. This is the reason why the credit risk factors supplied with your score are important. They identify what elements from your credit history are having the greatest impact so that you can take proper action.
How Long Does It Take to Rebuild a Credit Score?
Actually, you don’t rebuild the credit score. You rebuild your credit history, which then is reflected by your credit score. The length of time to rebuild your credit history after a negative change depends on the reasons behind the change. Most negative changes in credit scores are due to the addition of a negative element to your credit report, such as a delinquency or collection account. These new elements will continue to affect your credit scores until they reach a certain age.
Delinquencies remain on your credit report for seven years. Most public record items remain on your credit report for seven years, although some bankruptcies may remain for 10 years and unpaid tax liens remain for 15 years. Inquiries remain on your report for two years.
