Negatives on Credit Reports

Things that are considered negative on a credit report are bankruptcies, judgments, repossession, past due payments, public records, and unpaid tax liens.

Each negative report stays on your credit history for different amounts of time. Bankruptcies are on a credit report for 10 years, unpaid tax liens 15 years, every thing else is on a credit report for 7 years.

Positives on Credit Reports

One great thing about credit reports is when positive information is reported it stays on forever. There is one exception of this and that is when you have an account that you paid and closed it will only show for 10 years.

How to repair your credit

There are a lot of agencies that claim to be able to repair your credit over night. This is impossible. Repairing your credit score happens with time.

If you keep making your payments on time and keep the promises made to your creditors, eventually your credit score will get higher. Also as time goes by the negative information will fall off, also helping your credit score.

Removing Information on Credit Reports

To remove any information that you feel is incorrect you need to write to the consumer reporting company with proof of what is incorrect. They will evaluate it and then decide whether it is incorrect or correct.

Information for credit reports are gathered by many different consumers credit reporting companies. When sending in a letter to have information removed it has to be sent to the company that reported that particular information.

Laws behind Credit Reports

There have been laws passed to protect consumer’s credit reports. One of the laws is that you are entitled to a free copy of your credit report from the three following credit bureaus, Experian, Trans Union, and Equifax. You can receive a free copy once every 12 months. This way you can make sure everything is correct.

To receive your free copy you can contact Experian at 888-EXPRIAN (397-3742) or www.experian.com, Trans Union at 800-916-8800 or www.transunion.com, and Equifax at 800-685-1111 or www.equifax.com.

Another law passed is called The Fair Credit Reporting Act (FCRA). This act helps to make sure that the consumer reporting companies are fair and accurate. It also helps in protecting the privacy of the information given to the consumer reporting companies.

There are amendments added to the FCRA to continue to set guide lines for the consumer credit reporting companies. These amendments also put responsibilities on the companies that gather the information and report it to the consumer reporting companies.

What is on a Credit Report

First of all they have all of your identification information, your employment and income, and all of the previous places that you have lived.

They will have a history of your payments to your creditors. Whether you have paid them on time or been delinquent. It also shows if some one as checked your credit when you apply for a loan or credit card.

When an employer or landlord checks your credit history it will also show up on your credit report. And you will also see when you have had a bankruptcy or unpaid tax liens reported.

It depends if you have a joint account or not. If the mortgage is under one persons name then it will only go on to that persons credit report. But if you have a joint account ie both your names show up on the bill then it will be on both of your credit reports.

If you are looking to build a great credit score to be able to get you in your home here is a good way to do it. Stay away from late payments, collection and bankruptcy. So if your late on your bills the credit companies don’t really care they will still send you a bill every month. One thing to realize that just one 30 day late payment can take your credit score from a very good 720 down to 680! Yes just one 30 day late payment can take your credit score down 50 points.

If you try to avoid paying your debts and they send you to collection and you think it is gone off of your record because it has been years since that went on you credit well think again. It will still be there listed on your report and the mortgage lender has the ability to make you go and settle that debt before he will approve anything for you and now he will raise your apr

Now bankruptcy can hit you harder then anything else taking hundreds of points off your credit score and it will stay with you for a long time even up to ten years on the report. Now, a bankruptcy does not automatically bring a credit score down. Mortgage people have reported many instances of people with past bankruptcies on their credit report earning better credit scores than borrowers without one. Borrowers who establish new credit after a bankruptcy and maintain an excellent credit history with everyone they owe afterward for at least two to three years can often achieve acceptable credit scores then those who have never had a bankruptcy on there credit score..

Another credit scoring factor is a borrower’s amount of debt against available credit. A person with $19,995 borrowed on credit cards with $20,000 in credit limits will be penalized by all credit scoring systems even with a perfect payment history every time. The reason for creditors is that a borrower at maximum credit limits has no room to handle any emergencies that may arise during the time of the loan. The only problem with this is that a borrower may have $100,000,000 in a bank account to handle problems but credit scoring does not take this into account.

Since all studies appear to show that the credit scoring systems fairly accurate to predict whether a borrower should be approved for a mortgage loan many have adopted credit scoring guidelines for lenders who sell loans. The meat of it is that people with credit scores over 660 will have acceptable credit. Those between 620 and 660 will most likely be approved but will probably have to work harder for their approval by showing other positive factors (such as a large amount of assets, steady income and employment or large equity positions) to support their application.