Being at a lost when dealing with credit monitoring, repair, or maintenance can make it a very frustrating process.
Here is a list of 5 keywords you should know and understand when reviewing your credit report and maintaining your finances.
Credit Report
is a detailed report based on a consumers credit history. Lenders often use a credit report alongside other information to decide an applicants credit worthiness.
Revolving Debt Ratio
is the comparison between balance and available credit. Keeping your credit balances below a 20% will give a significantly higher credit score rather then carrying a high balance month to month. Credit accounts make up for 35% of your entire score, so keeping credit lines high and balances low with on-time monthly payments can give you a quick score boost. Typically, you will see higher scores with a revolving debt ratio of 30% or lower.
(Hard/Soft) Inquiries
will appear on your credit when a lender (more commonly credit cards or loans) requests to check your credit report before finalizing a lending decision. However, hard inquiries are the only inquiries that can and will report negatively, lowering your scores. Having to many hard inquiries reporting on your profile often makes you look risky and desperate, lowering approval odds. Having a healthy and clean report with fewer hard inquiries can be crucial in maintaining a good credit report. Soft inquiries will only appear by certain bureaus, and do not affect your credit scores. Typically employers who are performing a background check, checking your own credit, or pre-approval offers fall into the “Soft Pull” category, and will not affect you what so ever.
Collection Accounts
are past-due or delinquent accounts negatively harm your credit profile and lower scores. These are accounts that have been turned over or sold to a third party agency. This relieves the original creditor of collection efforts and the third party assumes responsibility for further collection efforts. Collection accounts often remain on a credit profile for seven years from the date the original creditor labeled the debt delinquent to the bureaus and credit reporting agency.
Dispute (forms/letters)
creates an avenue for consumers who question a validity of a debt or accounts reporting; forcing the agencies to respond with a validity of the debt within an allotted time frame.The Fair Credit Reporting Act was signed into law in order to protect consumers from shady creditors, and promote accuracy, fairness and privacy of consumer information.
If you have questions about a negative account reporting on your credit profile, and want a free consultation, be sure
to sign up on our website or give us a call at 1(800)216-2725.