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Credit Report Basics you need to know

By Janet Lacey
Published: Saturday, April 24th, 2010

When you apply for a credit report, there are a couple of things in it that you should be acquainted with. If you don’t rectify the mistakes when you spot them, it might become too late and even harder to have them corrected at a later stage. This could end up being a problem for you and hence, this is something that you are better off avoiding. After all, your credit score is going to dictate how much money you are going to be getting and whether or not it is possible to get a better rate of interest at a later stage thanks to your credit rating.

Correcting mistakes

As soon as you get your credit report, make it a habit to go over all the details of the report and rectifying any of the mistakes right away. Usually, this is done by writing to the credit bureau, which should be the place that you might have got the report from. Since you are allowed by law to get one report each year, it is possible that you might be able to correct the error before it goes out of hand and can severely hamper your chances of getting credit in the future.

Understanding the sections

A credit report is not just a sheet with your credit number on it. There is a lot more to it as well and you should make sure that you go through all sections with adequate attention. Most people want to directly jump to the credit history section to get to know how their credit history reads like and their current score is. While this is perfectly fine, don’t skimp on other sections and do look over them as well. It is quite possible that these other sections might also have incorrect information or perhaps information that you need to be aware of in order to build your score.

Improving your credit image

If your credit report says bad things about you, don’t panic and try to do something drastic. Take your time and analyze your finances to see if there is something that you can do in order to fix your credit scores. Only when you are absolutely sure that you cannot do anything, you should go ahead and think of other options that you can perhaps think about applying. Taking out more loans should not be considered because it can get you into more trouble later on. If you don’t know any other way, then go in for these loans.

Busting Myths

There are many myths associated with credit reports. The first thing you should get off your mind is that if you check your credit score, there will be no impact to the score as such. These are not looked as a bad thing by the credit bureau, hence go ahead and order that credit report without thinking too hard about it. Since the scores are a cumulative contribution of the three bureaus designated with the task, it is not something that you need to know, which justifies the need for a report of this kind.

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