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Merchant Trade Lines
These include all regular credit
lines such as department store cards, auto loans, mortgages, and
credit cards. If there is any history of late payment, or if the
trade line was included in bankruptcy, charged off, or put into
repossession, the listing will be considered negative by all credit
grantors.
Collection Accounts
When an account is referred to
collections because of delinquency or because of a bad check, this
appears on the credit report as a collection account. Collection
accounts can appear as paid or unpaid accounts. Any type of
collection account, whether paid or not, is considered very negative
by all credit grantors.
Public Records
Public records include bankruptcies,
judgments, liens, satisfied judgments, and satisfied liens. All
court records, including satisfactions, are considered negative by
all credit grantors.
Inquiries
Every time a potential credit
grantor looks at your credit file, a credit inquiry appears on at
least one of your credit bureau reports. If the number of inquiries
is very few over the last two years, then there may be no negative
effect on your credit worthiness. However, if there are many recent
inquiries showing on your credit report, credit grantors may become
nervous and deny you credit.
How Long Will Negative Information
Stay on My Credit Report?
The Fair Credit Reporting Act (FCRA)
requires that most negative credit items be deleted from your credit
bureau file in no more than seven years, except for a chapter 7
bankruptcy which can be reported for up to ten years. These are the
time limits for reporting negative credit. The creditor or
the credit bureau can choose to have the negative credit information
deleted whenever they please. Inquiries may remain on the credit
report for up to two years.
Can I See My Credit Report?
Most credit grantors are not allowed
by the credit bureaus to show you your own credit report. But you
can purchase your credit report from the credit bureau for a fee.
Once you receive your credit report, you may find that you cannot
read it because the information is listed in an unfamiliar code.
Trans Union and Equifax credit reports are very difficult to
interpret and understand. Experian credit reports, however, are
relatively easy for most people to read. Your best bet would be to
order a 3-in-1 combined bureau report since they are the easiest to
read. To order one, visit www.creditrepair.com.
How Much Bad Credit Does it Take for
Me to be Denied Credit?
As you may have already experienced,
even one small late pay listing may result in credit denials. It is
a myth that a large amount of positive credit can outweigh some
negative credit. Any negative credit whatsoever can become a
substantial credit obstacle.
Who Looks at My Credit Report?
With the passing of each year, your
credit report is used more and more often as a yardstick to measure
your character. Prospective creditors will always review at least
one of your credit reports before granting you credit. Today it is
increasingly common for insurance companies to review your credit
before extending auto or health insurance. Many employers now check
credit before they consider you for a position. If you rent, you may
have already been through a credit check to determine your
worthiness as a renter.
Credit is a way of life in America.
Without good credit, you have to take your seat in the second-class
section of our economy. But, if your credit is in shambles, you may
not be willing to wait for seven years while your credit report
clears itself.
Is there anything you can do to
speed your return to creditworthiness?
YES ! Pay your bills on time,
pay off unsatisfied judgements and liens and correct or dispute all
incorrect information on your credit report. Also, minimizing
your unsecured debts as much as possible can also improve your
credit score. Many will tell you that credit information
cannot be changed until it is removed. This is not true.
Incorrect information can be changed. Past mistakes can be
mitigated by simply paying your debts in a timely manner. We
do not recommend paying credit repair clinics to repair your credit,
because many of them are not reputable. We do encourage
individuals to learn about the credit reporting process, and dispute
credit information where possible. We also recommend that
members work to establish strong payment histories with their
creditors.
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