Turning Bad Credit into Good Credit

Are you a credit risk? Do you need credit repair? Let's start at the beginning, credit reports. This article is designed to teach you about your credit report. It is assumed by the author that you have established credit. Your credit history has value. And like anything of value, it must be treated with respect and protected.

In order to improve your credit and increase your credit score, you must first know what your dealing with. Get a copy of your credit report. This can be done for free, every 12 months, at: AnnualCreditReport.com. Here, you can request, FOR FREE, your credit report from each of the nationwide consumer credit reporting companies. There is no membership fee, monthly fee, or required payment. However, your FICO Score is not included. It can be purchased from any of the credit reporting agencies.

The three most common credit bureaus are:

EQUIFAX

EXPERIAN

TRANS UNION

Well, now you have it, how do you read it?
Do not assume that your report from one reporting agency will be identical to the other two. You should review all three.

YOUR CREDIT BUREAU IS BROKEN DOWN INTO SECTIONS

PERSONAL INFORMATION This would contain your name, address, employer, date of birth, and social security number. Previous information is also listed.

PERSONAL STATEMENT This is where you can add a comment to your report. A common example would be a fraud alert or reason for a particular account with a negative rating.

ACCOUNT HISTORY This is a listing of your individual creditors, by type.

1. Account Number Each creditor will show your account number. For security reasons, it will often be in part. For example: Account Number: ***123.
2. Account Type Like Real Estate and Revolving Accounts. Both secured and unsecured debts are listed.
3. Credit Limit How much credit this lender extended to you.
   
4. Current Balance This amount is the debt you have with the lender at last reporting. It may or may not be equal to the credit limit. It may or may not be equal to the Pay Off Balance.
5. Estimated Date Item Will Be Removed Positive information may have no removal date. A paid closed account shows for 10 years. Request for your report remain for 2 years. Potential Negative information like late, or missed payments, and public information, remain for 7 years. Bankruptcies remain for 10 years. Tax liens show for 15 years if unpaid, and 7 years for paid. When a specific account will be deleted, is reported here.
   
6. High Balance This is the most debt you have owed the lender. It may or may not be equal to the Credit Limit or Current Balance.
   
7. Opened Date When you started the loan.
8. Pay History or Credit History This is the tracking of your payments, received over time.
9. Reported Date When the creditor starting reporting this account to the Credit Bureau.
10. Delinquent Accounts Your debts that the original creditor has turned over to a collection agencies are often times separated from 'accounts in good standing.' The original creditor will be listed along with the name of the agency that reported it to the Credit Bureau. An account does not have to be in a collection agency to have a negative entry on your report.

PUBLIC INFORMATION This is information about you from the courts. For example, Bankruptcy, Judgement, Liens, and Law Suits.

INQUIRES This is a list of those that requested your report. The date of inquiry is also included.

CREDITOR CONTACT This is a listing of each Creditor name, address and sometimes phone number of each creditor on your report.