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Credit Report Bad News

By Faye Mergel
Published: Thursday, August 5th, 2010

Press journalist at work with their new photographsNo one knows what goes on the minds of lenders and credit card report viewers when they look through the data in the credit reports. Credit card holders maybe biting their nails as their future lenders are skimming through the details. Others would ignore the situation thinking that they have been doing good credit management and there’s nothing to be afraid of.

Well, certainly, there is something to be afraid of. Credit reports viewer has their own agenda and criteria in evaluating a card holder’s credit background. The details included in the reports are their guideline in achieving a decision that will benefit them.

Hard inquiries or those that appear every time the cardholder makes an application for credit appear in credit reports. If the cardholder has multiple hard inquiries in his report, the lenders might think that the cardholder is deep financial problem and may be categorized as a high risk customer. There would be much problem if these multiple inquiries appear to be new which might indicate that the cardholder has a lot of new loan applications and is probable to be financially incapable. Most inquiries stay in the credit reports for a couple of years.

Overdue payments tell harshly about how cardholders’ payment behavior. Frequent delinquencies may depict an idea that it also applies to future loans. Even if the report indicates that all late dues were paid the next month, lenders may take this opportunity to approve the loan and increase the interest rates. On the other hand, landlords or lessors may be displeased to see the delinquencies and would view them as possible unreliable tenants.

Maximum reached credit limits scare lenders. Lenders may look at the cardholder as the highest risk and may even deny the application at once. Maxed-out credits may give them the idea that the cardholder creates credit more than they make payments.

Worst entries in credit reports are bankruptcy and foreclosure. These big words will be marked in credit reports for years. These are just a couple of entries cardholders never want to be placed in their reports. Not only will these reflect very high credit risk but it can also denote zero creditworthiness and irresponsibility, which also baffles employers and lenders.

Lawsuits and judgment are grave pieces of information that may complicate future loan applications, contracts and employment. Legal matters are very important to every report viewer because these complicate things. Even unpaid tax liens hurt the reports and remain on credit reports for 15 years.

These may all seem depressing to know. But knowing all of them makes cardholders aware that before being imaged as an unworthy and irresponsible credit cardholder, they should do their best in maintaining a good credit history. Cardholders will also be able to discover how they could repair their credit and build a report that would impress and invite report viewers.

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