In this video, Joel Bassam, the Director of Marketing for Easterns Automotive Group, explains the basics of understanding your credit reports.
Basics of a Credit Report
A credit report is a detailed record of your credit history that is gathered and maintained by three separate major credit agencies: Experian, TransUnion and Equifax. Credit reports are like digital file folders that hold details of your finances, like when you opened a credit card or whether you’ve been late making mortgage payments.
What Dealerships Look for in Your Credit Report
Easterns Automotive Group looks at three core parts of your credit report: history of credit, types of credit and the ability of credit. For more help understanding your credit reports, visit Easterns Automotive Group today.
- History of Credit
- Past actions and payment of lines of credit
- Types of Credit
- Looks at existing and past lines of all types of credit (Credit Cards, Loans, Mortgage, etc.)
- Ability of Credit
- Looks at debt to income ration to dertimine how much additional credit can be extended to an individual.
Checking Your Credit Report
By law, everyone is entitled to a free copy of their credit report from each of the three agencies every year. Understanding your credit starts by requesting copies to see where you stand. Go to annualcreditreport.com to request yours and check for any discrepancies.
What’s in a credit report
- Personal information
- Social Security number
- Birth date
- Phone number
- Look for incorrect identity information on any of your credit reports, and you can file a dispute or an update with the reporting credit bureau directly
- Employer history
- May be included in the personal information section.
- Employer information listed on the reports is typically there to help verify your identity.
- Consumer statements
- Contains any brief statements you’ve submitted to a credit bureau.
- Account information
- Open accounts
- Closed accounts
- The dates accounts were opened or closed
- Payment history
- Credit utilization
- Current account balance
- Loan payment status
- Late payments can stay on your credit reports for up to seven years from the date you missed the payment before they’re removed by the credit bureaus.
- Public records
- May include bankruptcies, foreclosures, tax liens and civil judgments against an individual.
- Hard inquiries occur most often when a bank or financial institution checks your credit.
- Unauthorized hard inquiries that you don’t recognize could be an indication of identity theft.
The Consumer Financial Protection Bureau recommends watching for the following errors:
- Accounts belonging to another person with the same name
- Accounts created through identity theft
- Incorrect payment history
- Wrong balance or credit limit information
- Reinsertion of previously corrected data
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