What Your Credit Report Says About You
Each of the following activities listed below lists how many points are gained or how many points are lost.
Three major credit bureaus report on individuals. They are Experian, Transunion and Equifax. Six agencies report on business credit. The content in each report may be similiar or may vary. Each of the credit bureaus reports information in four categories. The order in which these categories are displayed differs from one reporting agency to another.
Negative pay history results from missing a payment, late on a payment, refusing to pay a creditor, a creditor charges off an account and sends it to collection. By refusing to pay a collection the creditor/collector will seek to get a judgement for the purpose of garnishing your wages.
Did you know it is possible to pay a bill on time and still be considered late? How does that happen. Each creditor has a corporate bank. The location may be in a different time zone from where you are located. Your payment is due on the due date before 3pm in the time zone for their corporate bank. Therefore, you paid that bill on the due date and the creditor reports it late.
It is important to pay ALL your bills on time. Take this into consideration before you add another debt. Better to operate with the policy to be conservative. If this is a challenge for you because you have overextended yourself or your due dates don't coincide with your pay dates you will find a fix within the steps to success. Go to Step 2 Money Tools for help with budgeting. Due dates can be reset. Creditors will require that you are current with no past due balances.
When negative pay history occurs on just one account in a thirty day period you can lose up to 70 points but if you are late on two or more accounts in the same window of time, you can lose up to 130 points. It is always best to pay a day ahead of the due date to avoid damage to your credit report.
There are software programs available to remind you when your bills are due. If you are still paying bills through the mail, the only way to assure that they arrive on time is to send them certified. Barring that it is recommended to pay online. You have a printed receipt with a time date stamp and confirmation that youre payment was received.
Once negative pay history occurs, the only way to get it removed is to negotiate it off. Paying your balance does not reverse the damage nor do you get points back for paying it. It does not automatically disappear from your credit report after seven years either. When you obtain a line of credit, it is important to pay on time until the debt is satisfied. Too often an individual will max out their account and then apply for another line of credit and the pattern repeats itself. It isn't wise to get credit to pay off debt. The best remedy is to get credit to build credit.
Point Driven Inquiries
Inquiries occur when you apply for credit whether you are approved or denied. You are only allotted two inquiries per year. Any over that amount you lose 12 points each.
Albert Einstein- "It's complete insanity to expect different results from doing the same thing over and over again."