Credit Reports

What Items Are In Your Credit Report?

  • Identifying information such as name, address, date of birth, and names of employers. Most of this data comes from information you fill out on credit applications.
  • Trade lines – all of your credit cards and other accounts; the date that you opened the accounts, your credit limit, high balance, current balance, and payment history, etc.
  • Credit Inquiries – voluntary and involuntary inquires including account review inquiries( from your current lenders), hard inquiries (for new loan or credit applications) and promotional inquiries (for credit card companies and other solicitation offers).
  • Public Records (bankruptcies, foreclosures, wage garnishments, liens and judgments)
  • Collection accounts.

Items That Are Not Included In Your Credit Score

Although this information may appear on your credit report, it is not taken into consideration for your credit score:

  • Age
  • Race, color, religion, nationality, sex or marital status
  • Occupation, salary, employer, length of time employed
  • Where you live
  • Interest rates charged to you on credit cards or other account
  • Any item reported as child support or rental history
  • Certain types of inquiries (consumer initiated inquiries or promotional inquiries)

What Goes Into Calculating My Credit Score???

Payment History(35% of your score)

  • Current payment record for car loans, mortgages, retail accounts, installment loans, credit cards, etc. on paid as agreed accounts
  • Public records (bankruptcies, foreclosures, wage garnishments, liens and judgments)
  • Severity of delinquency (length of time past due)
  • Amount past due on accounts or collections
  • Recency of delinquency or public record or collection
  • Number of past due or derogatory accounts

Payment History Tips

  • Pay your bills on time (new late payments and collections have the largest impact on the score.)
  • If you are past due for any reason, Get Current! (The longer you remain current and pay your bill on time, the higher your credit score will be)
  • Be careful about closing accounts (this may result in losing valuable credit score points associated with that account)

Amounts Owed(30% of your score)

  • Amounts owed on revolving accounts
  • Total amount owed on all accounts
  • Number of accounts with balances
  • Proportion of balance to credit limits on revolving accounts
  • Proportion of balance still owing on installment accounts

Amounts Owed Tips

  • Keep balances low on credit cards and other revolving accounts. A general rule of thumb is to keep your balances below 30% of the credit limit or high balance.
  • Pay off debt instead of moving it around. (One of the most effective ways to improve your credit score is to pay down the balances on your credit cards or other revolving accounts. Owing the same amount but having fewer open accounts may result in a lower credit score. Keep as many of your revolving account below 30% of the credit limits of high balance. It may be beneficial to consolidate debt into one account, if you can get two or more account balances below 30% of the credit limit or high balance that were otherwise above that limit.
  • Don’t open new accounts to increase your available credit. (This can backfire and actually lower your score)

Length Of History(15% of your score)

  • Age of accounts
  • Number of recently opened accounts
  • Time since account activity
  • Proportion of new credit vs established credit
  • Re-establishment of new credit following adverse payment problems

Length Of Credit History Tips

  • If you have a relatively new credit history, stay away from opening new accounts too rapidly. New accounts may bring the scores down temporarily, especially if you have a lack of credit or a lack of established credit history. Rapid account buildup can be seen as a risk factor.
  • Re-establish yourself after prior payment history problems. Opening new accounts responsibly and paying them off on time will increase your credit score in the long term. This is not a suitable strategy for increasing the scores in the short term.
  • Too many consumer finance companies can be seen as an adverse factor (creditors known to lend to consumers with less than perfect credit history).

Types Of Credit Used(10% of your score)

The number of various types of accounts (credit cards, retail accounts, installment loans, mortgages, consumer finance accounts, etc.)

Types Of Credit Tips

Apply for and open accounts only as needed. (Opening new accounts is not a short-term solution.) It is a good rule of thumb to have 3 open and active revolving accounts along with 1 to 2 installment accounts and one mortgage.

New Credit/Inquiries(10% of your score)

  • Number of recently opened accounts
  • Number of recent inquiries
  • Time since inquiry
  • Time since account opening
  • Your credit score takes into consideration all of these factors. In some situations, one factor can have a larger influence on one person’s credit score. This depends on each individual credit situation and credit history.

Credit Inquiries

A credit inquiry will appear on your credit report when your credit report is pulled for purposes of extending credit or by your current lender for other purposes.

Hard Inquiries

These inquiries affect your credit score. When you apply for a mortgage, auto loan, credit card or other type of account, you authorize the lender to obtain a copy of your credit report. These types of credit inquiries, when prompted by your own actions, appear on your credit report and will impact your credit score. Avoid an excessive amount of inquiries. Excessive depends on the depth of the credit profile. More than 5 inquiries may be excessive for people with a lack of credit. If you are shopping for a mortgage or automobile and you know you will incur multiple inquiries, make sure you have your credit pulled within in a short, focused amount of time. Depending on which scoring system you are dealing with, you may have a 15 day, 30 day or 45 day window to shop for and apply for credit for the purpose of obtaining a mortgage of automobile financing, thus incurring inquiries without the inquiries counting against you separately. The scoring system recognizes that you are shopping and will count the multiple inquiries as a singular inquiry, if it falls within the allotted timeframe.

Account Review Inquiries & Consumer Based Inquiries

These types of inquiries do not affect your credit score. When you choose to pull your own credit report through an online resource, it is considered a consumer-based inquiry and will not affect your credit score. Also, many of your creditors or collection agencies have the ability to pull your credit report to review your account activity. Credit reports pulled by a prospective employer when applying for employment will not affect your score.

Promotional Inquiries

In many cases a company will pull your credit report in order to send you pre-approved credit offers or other promotional offerings. These inquiries do not affect your credit score. To prohibit the ability of creditors pulling your credit report for promotional purposes you must OPT Out by calling 888-867-8688.