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Understanding your Credit Report

Understanding Credit Report

Understanding your credit report can be initially overwhelming. CreditRegistry takes the mystery out of reading your credit report. From explaining the terms, you will see, to helping you understand what makes a credit report good or bad. Furthermore, you this post enables you to understand how it all works together to give lending institutions a detailed look into your financial history and how they judge your creditworthiness.

Access your Credit Report with CreditRegistry

You are entitled to one free credit report every year. If you have existing loans your credit status may change frequently; therefore, it is essential for you to track those changes as they happen. CreditRegistry provides options to help you monitor your credit report for inaccuracies and updates on a regular basis, giving you the knowledge you need to stay on top of your own credit performance. Reviewing your credit report and knowing where you stand is vital before you apply for loans.

Reading your Credit Report

Your credit report has four main sections, each with a different value in assessing your credit score. Let’s take a look at them.

Personal information

Understanding your credit report meme

This displays your necessary information such as your name, current and past addresses, identification numbers, and date of birth. Other information may include your previous and current employment information. Check that the information is accurate.  Basic information has no impact on your creditworthiness.

Credit history

This is an itemized list of your loan information as reported by lenders. This indicates the financial institution that you have borrowed from, the amount of the loan, the type of the loan, and how much you still owe. This is also where you can see the paid off accounts, and which are still outstanding. This information plays a vital role in your creditworthiness.

Public Records

This lists tax liens, bankruptcies, negative judgments involving collections, and foreclosures. The more you have in this section, the less your creditworthiness.

Inquiries

Here you can see how many times your credit report has been accessed by lenders when you applied for a loan. This has a much smaller effect on your creditworthiness compared to your loan payment history, but it is still considered.

                                                   Being in Good Standing

One of the many benefits of regularly reviewing your credit report through CreditRegistry is your ability to see how healthy your accounts are. This is the biggest piece of information that lenders will consider when assessing your creditworthiness. What lenders look at in your credit report are:

Credit Status

Financial institutions want to see a mixture of different types of loans: credit cards, term loans, mortgage and car loans when they assess your creditworthiness.

Total balances

Banks and lenders want to see how well you manage your credit, so high balances on credit cards, or high debt relative to your income, are red flags that can significantly affect your creditworthiness.

Monthly payments

This is the minimum amount that you must pay each month. You may pay more than this amount each month, but lenders look at the total amounts of the expected minimum monthly payments to see how they affect your ability to pay for more credit.

Account status:

Lenders take into consideration the age of your accounts and whether they are still open, paid in full, or charged off to collections.

Payment history:

This is the biggest piece of information your lender will assess when considering you for a loan. Payment history accounts for a large part of your total credit score. Your credit report shows if you have any due payments, they will be listed with the amount owed and how late you were on the payment. Even if you have paid the late balance and restored your account with a lender, the negative payment actions remain on your report. Late payments and missed payments are all indicators of low creditworthiness.

Getting your Credit Back on Track with CreditRegistry

Even if your first credit report is poor, you can make improvements and bring it back on track. Let’s take a look at some of the ways you can do this:

Call your creditors

Arrange payments on outstanding or late balances. When you read your credit report, you will see that the credit bureau lists all of your creditors.

Arrange payments on outstanding or late balances. When you read your credit report, you will see that the credit bureau lists all of your creditors. Click To Tweet

Check your credit report

You’ll want to do this thoroughly to be sure all of the accounts are yours. Identity theft is on the rise, and for some, the first time they realise they are victims is when they check their credit report. CreditRegistry can show you how to deal with identity theft.

Don’t close accounts with zero balances.

Every open line of credit adds to your total credit line, making it a little less of an impact to carry slightly higher balances on the credit that you do use. Also, older accounts add to your combined credit age average; lenders like to see that you have older, established accounts.

Every open line of credit adds to your total credit line, making it a little less of an impact to carry slightly higher balances on the credit that you do use. Click To Tweet

Check outstanding balances

Check your credit report to be sure all the outstanding balances are accurate. Pay particular attention to accounts sent to collection agencies. Again, sometimes the first time a person is aware of an account in a collection agency is when they see it on their credit report. Just because information is on your credit report doesn’t mean it is accurate, and the credit bureau can rectify inaccuracies in your report.

Dispute inaccuracies

Don’t be afraid to dispute inaccuracies. Furthermore, if you see something wrong on your credit report, you need to take action to have it corrected with CreditRegistry. We can show you how to fix errors on your credit report.

Limit the number of inquiries

Watch how many inquiries are on your credit report. Applying for too many loans in a short period is a red flag to lenders; while queries are not a large part of their consideration, they can have a negative impact on your creditworthiness.

Consider a co-signer

If your credit is extremely poor, think about co-signing on a loan with someone who has better credit than you. The banks will be more willing to consider someone with bad credit if they partner with someone who has good credit.

Apply for loans

Having no credit history is nearly as bad as having a poor credit history. Apply for small lines of credit and pay them back on time, doing so establishes your credit. Make sure the financial institutions you choose reports to CreditRegistry regularly.

Make regular payments

Carry small balances on your accounts and make regular payments. It may seem like paying your accounts off immediately is helpful, but when establishing creditworthiness, you should always make smaller payments and carry the balance over several payments. This helps show that you can make regular, on-time payments. Pay your debts on time. If you have a problem paying by the due date, call your lender and request other payment arrangements. When you pay late, not only are you hit with extra charges—interest and late fees—but lenders will report to CreditRegistry payments which more than thirty days late.

                  CreditRegistry has the Know-How to Help You

Your credit is important in ways you might not have thought of. While everyone knows that you need positive creditworthiness to get a loan or a credit card, your creditworthiness may affect you in ways you didn’t know.

  • A company you do business with may request your credit report for the following purposes:
  • Applying for or guaranteeing a loan
  • Reviewing, renewing, restructuring or monitoring of existing credit facilities
  • Carrying out employment checks on employees or prospective employees
  • Assessing the creditworthiness of a prospective tenant in any lease or tenancy
  • Underwriting, reviewing, renewing insurance policies or analyzing insurance claims
  • Considering applications for credit contracts or other post-paid services
  • Taking action in respect of debt collection, enforcement of a monetary judgment of any other debt

Above all, understanding your creditworthiness is so much more than just getting approval for a loan. It can affect you in many more ways. We are here to help.

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