Understanding Your Credit Report – What Does It All Mean? Part 2
Posted on | August 18, 2010 | No Comments
Your credit report lists a summary of the details and terms for each account. This summary includes information about the account number, condition, balance, type and pay status for each account. The summary for collection records is slightly different.
The following information is for real estate, installment, revolving and other type records:
- Creditor: The official account name. This name may be different than you expect if your account is managed by a larger financial corporation.
- Account Number: This is an identifying number for your account. Typically, this would be a credit card number for a credit card account or a loan identification number for a mortgage. A portion of the number is hidden for security reasons. A partial account number is all that is needed to file a dispute about the record.
- Condition: This is the account’s status as open or closed, according to the most recent update from your creditor.
- Balance: The amount you presently owe on the account based on the last reported activity. Very recent activities may not yet have appeared in the bureaus’ computer system so this balance may be a few days out-of-date.
- Type: The account’s specific type. Some common types are real estate, automobile, educational and credit card accounts.
- Pay Status: The account’s payment status, according to the most recent update from your creditor.
For each account, the report also displays an illustrated payment history over the last 24 months. There will be a key at the top of this section describes each payment history symbol and what it indicates for your account. Green boxes marked “OK” show that your payment was made on time.
Understanding Your Credit Report – What does it all mean?
Posted on | July 30, 2010 | No Comments
You may have more than one account from a creditor. Many creditors have more than one kind of account, or if you move, they transfer your account to a new location and assign a new number. The entry will also include:
- When you opened the account
- The kind of credit (installment; such as a mortgage or car loan, or revolving; such as a department store credit card)
- Whether the account is in your name alone or with another person
- Total amount of the loan, high credit limit or highest balance on the card
- How much you still owe
- Fixed monthly payments or minimum monthly amount
- Status of the account (open, inactive, closed, paid, etc.)
- How well you’ve paid the account
On Experian’s report, your payment history is written in plain English — never pays late, typically pays 30 days late, etc. Other comments might include internal collection and charged off or default. Charged off means the creditor has given up, thrown in the towel. Basically, the company has made efforts to collect the debt, realized that it’s not going to be paid, and subsequently wrote it off.
Other reports use payment codes ranging from 1 to 9; an R1 or I1 on a report is an indication of a good payment history on a revolving or installment account. Often, the code key will be listed on the report so you can better understand what the codes mean, but they may not.
Credit accounts are divided into five categories: real estate, installment, revolving, collection and other. Here is a better description of each category:
Real Estate: First and second mortgage loans on your home.
Installment: Accounts comprised of fixed terms with regular payments, such as a car loan.
Revolving: Accounts with opened terms with varying payments, such as a credit card account.
Collection: Accounts seriously past due that have been assigned to an attorney or collection agency.
Other: Accounts where the exact category is unknown. This could include 30-day accounts, such as an American Express card.
Understanding Your Credit Report – How Do I Read This Thing?!
Posted on | July 27, 2010 | No Comments
Once you get a copy of your credit report, it’s important to know how to read it. There are going to be an awful lot of numbers, abbreviations and terms you’ve never seen before. Trade lines, charge-offs, account review inquiries — how do you read this thing?
Experts suggest that if you are serious about improving your credit score, you need to examine a report from each of the three major credit reporting agencies. You are allowed one free credit report annually from www.annualcreditreport.com, or if you have been declined credit for any reason you should be able to contact any of the three agencies and receive a free one also.
Why do they suggest you have all three? Creditors can pick and choose which credit reporting agency they want to report to. Some will report to all three, but many won’t. You may find that what is included on one report isn’t on another. The reports will have different information because it’s a voluntary system, and creditors subscribe to whichever agency they want — if any at all.
A credit report is basically divided into four sections: identifying information, credit history, public records and inquiries.
Identifying information is just that — information to identify you. Look at it closely to make sure it’s accurate. It’s not unusual for there to be two or three spellings of your name or more than one Social Security number. That’s usually because someone reported the information that way. These variations will stay on your credit report. If it’s reported wrong, leave it because it might mess up the link. Don’t be concerned about variations.
Other information in this section might include your current and previous addresses, your date of birth, telephone numbers, driver’s license numbers, your employer and your spouse’s name. The data in this section is often used to verify your identity or to confirm that the information you provided for an application is accurate. Small variations in this data between the three bureaus are normal as each agency may have their own recording procedures.
The personal information section of your credit report may also include a “consumer statement.” This is a statement that you asked the credit reporting agencies to add to your report. Commonly, this statement is used to explain a record on your report.
For example, “The Smith Bank account from 2004 was a shared account with my ex-husband.” This statement does not impact your credit score but may help you clarify a situation to a potential creditor or lender and improve your chances to obtain credit.
The next section is your credit history. Sometimes, the individual accounts are called trade lines. Each account will include the name of the creditor and the account number, which may be scrambled for security purposes.
Tags: credit > credit report > credit score > free credit report
Understanding Your Credit Report – How to Get It…Your Credit Report, that is.
Posted on | July 26, 2010 | No Comments
The very first step you need to take when trying to raise your credit score is to find out what your score is and what it means. Legislation called the FACT Act was passed that allows all of us to get one free copy of our credit report every year. This report lists all of your debts you’ve had and your payment history on those debts.
It will tell you where you owe money, how much you owe, and how you pay (on time, 30 days late, etc.). All of that information is compiled together and then analyzed.
After the analysis, a number is assigned to you as to what your credit fitness level is. Potential creditors then look at your credit score and decide if you are going to be able to pay back the amount of money you are requesting to borrow.
That’s the short version. Actually, there is much, much more involved in determining your credit score. However, what should be important to you is to know how to read your credit report and how to raise that score so that you are able to get the things you need. Remember that – the things you NEED, not the things you WANT!
Let’s start with how to get your credit report in the first place. There are three major credit reporting agencies that will offer you the one free credit report each year. They are Experian, TransUnion, and Equifax. You can contact each of them directly in the following ways:
*Equifax – Online, you can find them at www.equifax.com. You can also order your free credit report by mail. However, they only offer this option for free to residents in the states of Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey, and Vermont. All other states are required to pay a $10 fee. If you want to do this by mail, send your request to Equifax Information Services, LLC; Disclosure Department; P.O. Box 740241; Atlanta, GA 30374. You can also call them at 1-800-685-1111.
*TransUnion – Their web address is www.transunion.com. As with Equifax, you can also make your request via mail by getting a copy of their mail request form online and sending it to the address provided. You can also call them at 1-877-322-8228.
*Experian – www.experian.com is where you can make a request for a credit report from this credit reporting agency. As with TransUnion, you will need to download a form from their website if you wish to request your credit report by mail. By phone you can call 888 397 3742.
There are also a myriad of websites who will also allow you to download your free credit report from their websites, but they ultimately will just be forwarding you to one of the above websites anyway. However, they are worth checking out for the information that you can find on them. Here are a few:
- www.annualcreditreport.com – this is the official site to help you obtain your totally FREE credit report (One per year)
- www.freecreditreport.com – This one is free also, but you need to sign up for ongoing monitoring which you pay for
- www.creditreport.com – 7 day free trial with ongoing monthly membership required
- www.freescoreonline.com – free w/7 day credit diagnosis trial
The main thing is that you will want to get your free credit report in order to find out where you stand and how far you have to go to repair your credit. Most of the time when you download your credit report, you will be able to view and save it instantly. Save it to your computer’s “My Documents” file if you can. That way you’ll be able to print it out and refer to it as much as you need.
Also, some of these sites offer low-cost memberships that will alert you if a new item comes onto your credit report. Their services will offer many different things, but purchasing a membership is strictly voluntary and probably not necessary if you want the straight truth. Make sure you read the small print before signing up.
Tags: credit > credit score > debt > debts > free credit report > raising your credit score
Understanding Your Credit Report – Cont.
Posted on | July 25, 2010 | No Comments
When you add credit card debt to the regular bills you have to pay each month, this can tax anyone’s budget. As a result, some of your bills go unpaid and others are paid late.
Both of these instances can damage your credit sometimes so much that you think there’s no way you’ll ever be able to get out of debt and get credit for something important like a home or a car. I felt this way for a long time, but we are now seeing a bright light at the end of the tunnel.
The truth is that you can get out of debt and repair your credit nearly to what it was before you had credit problems. It takes some time and a little work on your part, but it IS possible. We had been in really bad shape, and thought we would NEVER get out of it, but our credit score has finally risen to where we need it to be and are now in the process of purchasing a new home.
Loan approvals and such depend on your credit score. That number is what determines if you can get credit, what your interest rate will be, and how much money potential lenders will give you. A good median score is 750, but the higher your score is, the more financially sound you are.
While it’s always a good idea to try and stay away from credit, not everyone has a couple hundred thousand dollars lying around to buy a home or twenty thousand to buy a car. Heck, for some people, scraping together five thousand dollars for a good used car is difficult. That’s why you need credit. So you can buy that which you cannot afford.
Where the trouble comes in is when we begin to buy everyday items such as groceries and clothing on credit cards. Then those bills begin to get bigger and bigger until pretty soon, we’re paying the minimum amount due which will take forever to pay off. Plus, a lot of us just continue charging things even when we have a large balance on our account.
Your credit score defines who you are to businesses and you want it to be as high as it can be. It doesn’t matter how bad your credit is now. There are ways that you can raise your credit score no matter how low it is now. Don’t despair; just get started – right away!
Tags: credit card > credit card debt > credit cards > credit report > credit score > debt
Understanding Your Credit Report – Credit Cards
Posted on | July 23, 2010 | No Comments
Recent studies have shown that ninety percent of us have at least one credit card – and we are using that card – A LOT!
The average family carries a balance of between $7,000 and $10,000 on all their credit cards. Over $1,000 per family goes on interest every year. And that’s just the average – some of us owe much more!
Overall, we spend over $1 trillion every year on our credit cards, and owe more than $500 billion of it. If debt continues at the current rate, then one family in a hundred will be forced into bankruptcy. Over 90% of our disposable incomes are spent paying back debts.
Tags: credit card > credit cards > credit report > debt > getting out of debt
We are a country in debt….
Posted on | May 19, 2010 | No Comments
We are a county in debt. All you have to do to figure that out is turn on any news channel…it seems that all they talk about is how bad the economy is and how the government is in debt up to it’s eyeballs. And it’s not just the government that is in debt, but we, as Americans, are in debt ourselves and the problem is not going away…it is getting worse!
Did you know that 1 in 7 Americans carry ten or more credit cards…TEN or more! Do we really need that many? The average family carries a balance between $7,000 and $10,000 on all their credit cards. Over $1,000 per family is paid in interest alone, every year! Imagine what you could do with the interest alone…start a fund for a family vacation, down payment on a car, help others in need, and the list goes on and on. These numbers are just averages, some people owe much more.
Overall, Americans put over $1 trillion every year on their credit cards, and owe over $500 billion…meaning we are only paying off half of what we put on them. The rest becomes debt. Debt that usually takes years and years and years to pay off. If debt continues at the current rate, 1 family in 100 will be forced into bankruptcy. Over 90% of Americans’ disposable incomes are spent paying back debts.
I totally understand these numbers because this is how our family has ‘survived’ for so long. But, we are finally putting a stop to it and turning our lives around…..so looking forward to the end result. 
What does ‘being in debt’ mean to you?
Posted on | May 17, 2010 | No Comments
I think before before we can learn how to be debt free, we need to understand what being ‘in debt’ means to us. To some, being debt free means paying off the credit cards. To others, it may mean not having a car payment any longer, no credit cards, etc. And still to others it means, NO DEBT WHATSOEVER….no mortgage, no credit cards, no car payment, etc., etc.
I know that I personally, want to be in the last category and to do that I need to figure out how to pay off the debt I owe, plus bring in enough income so that I can pay CASH for everything else that I want…more on how to do that later.
To put it simply, debt is the money that you owe…whether it is to a credit card company or a bank for your mortgage or car payment.
Getting into debt is easy and it might even be fun…at first. We all want to have that nice car, nice house, and don’t forget that nice pair of shoes or article of clothing that we just HAVE to have! And if we don’t have the cash available for it those credit card companies make it so easy to ‘borrow’ the money from them. And we (myself included) find it easy to justify it by saying we’ll pay it off as soon as we get the bill. Well, for those of you that do that, kudos to you….but you are the minority! When we don’t pay it off each month, it turns into that nasty little word…DEBT. Ugh!
Have you ever heard of cholesterol? In this day and age, who hasn’t? Well, just like there is good and bad cholesterol, there are good and bad debts. Debt can make your life easier or ruin your life, but however bad your debt issues are, there is always a solution.
Those who know how to handle debt and manage their credit, can use it to their advantage. But there are still alot of us out there who never learned how to manage their debt and are now in trouble. It doesn’t matter if we are told from a young age to have good credit, live within your means, etc., if we are never taught how to accomplish that feat. I know this for a fact, because I was raised that way, but it surely didn’t help keep me on the right track. I guess at least I knew that was the goal, but no one ever taught me how to reach that goal, so it took many years of failing to figure it out. I believe we are finally on the right track and that is one of the reasons why I want to share the things I have learned with you.
You know, debt is not all bad…we often have no choice but to take on debt. Student loans are a good tool to be able to make it through school without having to work 3 or 4 jobs, and not be able to apply yourself as you should to your schooling. You just need to have a plan to pay the loans off when you graduate and get out in the real world.
If you can afford to pay for things in cash and limit the use of credit cards and taking on debts, then by all means DO IT! Do not hesitate to pay with cash (or a check card tied to your bank account) when you have the money. Taking on debt, just to spend it on things you really do not need is the worst thing you can do.
You must keep your debt under control…do not let it control you! If you are already in over your head, create a plan and stick with it the best you can and you WILL get out of debt!
Posted on | April 21, 2010 | No Comments
This website is going to be all about helping mom’s find ways to get there families out of debt. I will be posting articles, personal stories about our family’s road to being debt-free (which is still in progress but getting closer every day!), and eventually have ways for y’all to contribute and communicate via forums. I am so excited about this venture and if I can help just one family reach their dreams of being debt-free, it will be worth it.