Your credit report is one of the most important documents of your life. It’s like your financial permanent record. Nearly everything you do with money follows you around on your credit report for future creditors and lenders to see and judge you by. You should look at your credit report at least once a year to make sure everything’s being recorded correctly. Here are three things you should check when you review your credit report.
It’s your report. Check the name, current and previous addresses, and current and previous employers. Confirm that the correct names are associated with your social security number. Married women may see their maiden names on their credit reports. But, if you’re a Jr. or Sr., make sure the correct one appears on your report.
The accounts are yours. Look through each account to be sure it’s yours. Mistakes have been known to happen, putting the wrong credit card accounts on the wrong credit reports. If you find an account that doesn’t belong to you, dispute it with the credit bureaus. If you find multiple inaccurate accounts, you may have been a victim of identity theft. In that case, you should file a fraud alert with the credit bureaus.
Your payment history is correct. Each account lists the number of delinquencies you have in your payment history. For example, one of your accounts might say “30 days late, one time” or “charged-off.” Delinquent payment history is negative and can only be reported for seven years. If the late payments are inaccurate or the reporting time limit has passed, you can dispute the information with the credit bureau.
When you order your credit report, it will have instructions on disputing negative information. Make sure you send your dispute in writing and save a copy for yourself. Expect to receive a response from the credit bureau within 30-45 days.
Showing posts with label credit reports. Show all posts
Showing posts with label credit reports. Show all posts
Monday, December 29, 2008
Friday, December 5, 2008
Getting a Good Loan Rate
These days getting approved for a loan is hard. Getting approved and getting a good interest rate is even harder. But, it’s not impossible.
If you want to get a good interest rate on a loan, the most important thing to have is a good credit score. Without a solid credit history, you can forget the competitive interest rates. These days, lenders are looking for credit scores of 720 or higher to give loan applicants a good rate. So before you fill out a loan application, check your credit score. That way, you’ll know whether you’re ok to apply for a loan, or if you need to do some work on your score.
For those who need some credit score work, one of the quickest ways to see a boost in your score is to dispute inaccurate items from your credit report. If your credit score is below 720, check your credit report to make sure there are no errors. If you do find a mistake, dispute it with all three credit bureaus to make sure your complete credit history is correct.
To look at all three of your credit reports, click here.
The other thing you’ll need to get a good interest rate is a verifiable income. The days of stated-income loans are long gone. With a stated-income loan, the lender would “take your word for it” so to speak in exchange for a higher interest rate. You got the loan without the trouble of proving your income. The bank got extra money. Everyone was happy. It doesn’t quite work like that. You need to be able to prove your income with recent paystubs, bank statements, and income tax returns. Some self-employed individuals who take large businesses deductions might have trouble even getting approved for a loan, much less get a good interest rate, even with good credit scores.
Finally, you’ll need to reduce your debt. Lenders want to see your debt-to-income ratio below 36%, even after you’ve taken on the new loan. You can calculate your debt-to-income ratio by dividing your total monthly income by your total monthly debt payments.
If you want to get a good interest rate on a loan, the most important thing to have is a good credit score. Without a solid credit history, you can forget the competitive interest rates. These days, lenders are looking for credit scores of 720 or higher to give loan applicants a good rate. So before you fill out a loan application, check your credit score. That way, you’ll know whether you’re ok to apply for a loan, or if you need to do some work on your score.
For those who need some credit score work, one of the quickest ways to see a boost in your score is to dispute inaccurate items from your credit report. If your credit score is below 720, check your credit report to make sure there are no errors. If you do find a mistake, dispute it with all three credit bureaus to make sure your complete credit history is correct.
To look at all three of your credit reports, click here.
The other thing you’ll need to get a good interest rate is a verifiable income. The days of stated-income loans are long gone. With a stated-income loan, the lender would “take your word for it” so to speak in exchange for a higher interest rate. You got the loan without the trouble of proving your income. The bank got extra money. Everyone was happy. It doesn’t quite work like that. You need to be able to prove your income with recent paystubs, bank statements, and income tax returns. Some self-employed individuals who take large businesses deductions might have trouble even getting approved for a loan, much less get a good interest rate, even with good credit scores.
Finally, you’ll need to reduce your debt. Lenders want to see your debt-to-income ratio below 36%, even after you’ve taken on the new loan. You can calculate your debt-to-income ratio by dividing your total monthly income by your total monthly debt payments.
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