Credit Management

A credit report contains information about your credit, bill repayment history and the status of your credit accounts. This information includes how often you make your payments on time, how much credit you have, how much credit you have available, how much credit you are using and whether a debt or bill collector is collecting on money you owe. Make sure you review your credit report to ensure that the information is accurate. If there are any discrepancies contact the credit reporting agency that provided the report containing the error.

There are three major credit bureaus: Equifax, Experian and TransUnion that gather and maintain information about you that is included in your credit report. The credit bureaus provide this information to companies or persons that request it, in the form of a credit report.

Credit bureaus get information from your creditors, such as banks, credit card issuers or auto finance companies. They also gather information about you from public records. Information in one credit bureau's report may be different from the information in another credit bureau's report because each credit bureau gets its information from different sources.

Positive information remains on your credit report indefinitely. Negative information remains on your credit report between seven and 10 years. Credit inquiries remain on your credit report for up to two years. When you apply for credit, you authorize lenders to ask or "inquire" for a copy of your credit report from a credit bureau.

Credit bureaus can provide credit reports only to: lenders from whom you are seeking credit, lenders that have granted you credit, phone and utility companies that may provide services to you, your employer (only if you agree), insurance companies, government agencies and anyone else with a legitimate business need for the information (e.g. landlords or banks).

• www.annualcreditreport.com
• www.creditkarma.com
• You can request a free credit file disclosure, commonly called a credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion.
  Disputing Errors on Credit Reports - Tell the credit reporting company, in writing, what information you think is inaccurate. Sample Dispute Letter
• Consumer Credit Reporting Companies
  • Equifax
    O. Box 740241
    Atlanta, GA 30374-0241
    1-800-685-1111
  • Experian
    O. Box 2104
    Allen, TX 75013-0949
    1-888-EXPERIAN (397-3742)
  • Trans Union
    O. Box 1000
    Chester, PA 19022
    1-800-916-8800

How a FICO Credit Score Breaks Down:

• Credit Reports and Scores
• myFICO

Your credit score is a number generated by a mathematical algorithm using information in your credit report. It is designed to predict risk, specifically, the likelihood that you will become seriously delinquent on your credit obligations in the 24 months after scoring. The two biggest factors that determine your credit score are payment history (35 percent) and amount owed (30 percent). Other factors include the length of credit history (15 percent) new credit (10 percent), and types of credit used (10%). Generally, a longer credit history will increase your score. New credit is based on how many new accounts you have established, how long it has been since you opened them and how many requests for credit you have made. The type of credit used is based on the overall mix of credit cards, installment loan, mortgage loans, etc. that you have. The more balanced the mix, the more likely this factor is to improve your score.

• Use secured credit cards. A secured credit card is just like a regular or unsecured credit card, you are required to put down a security deposit to provide assurance to the creditor that you will repay your debt. Your credit limit is often the amount of your security deposit or a percentage.
• Use store credit cards. Make sure you are aware of the interest rate and try to pay off the balance each month.
• Use gasoline credit cards.
• Place your apartment utilities in your name.

• Pay your bills on time.
• Keep your credit card balance(s) low or at zero.
• Manage your debt.
• Check your credit report regularly.
• Do not bounce checks.
• Only apply for credit you need. If you close a credit card account, your credit score may decrease.
• Contact your lender if you fall behind on your payments