If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

- Part 1 – Recognizing Your Debt Problem and Obtaining Your Credit Report
- Part 2 – Acting on Your Credit Reports

* * * * *

In learning how to repair your credit, you first learned to recognize the fact that you actually have a debt problem and that you need to do something about it. In Part 1 you also learned a little bit about credit reports and how it will help you with repairing your credit. Part 2 tried to explain to you that you need to act on your credit reports and how to do it.

Part 3 is a little more technical, but is a crucial step in learning how to repair your credit. Although taking action on your debt problem is what you really need to do, knowing exactly HOW to take the proper action in the first place will make that action much more effective.

Step 3 – How to Understand Your Credit Files

Understanding your credit files may be especially important if you’re in debt and constantly contacted by creditors. Your credit score may be affected if you are delinquent in your payments to your credit card or other loans you may have. If left unattended, you may not be able to get a loan. Although there are exceptions, the credit that is extended to you may come at a greater price, such as higher interest rates. Your credit file will determine this.

If your credit file has a low score and you are looking for a loan or even an apartment to rent, your application may be turned down. On the other hand, if your credit files indicate that you are a low risk, your chances of obtaining a favorable reply is increased greatly.

Your Credit score is part of a ‘numerical’ system‘ that determines your credit rate and score. These Credit scores generally rate anywhere from ‘300 to 850‘. If you happen to have an outstanding credit rate, these scores can even have a higher rating. If you apply for a loan and your lender is unable to find your credit file, you may be viewed as a mishap. This means that you haven’t established a credit history.

This is why it is important to establish credit at an early age. If you apply for department store cards, credit cards, gas cards or other items that offer you credit, then you are on your way to establishing a credit history and your file will be on record. The problem with applying for credit cards or loans, or any type of credit, is that when you start out, your parents are often co-signers. The implication is that if you do not not make payments then your parents are obligated to make those debt payments for you.

Every time you apply for a job, apply to rent an apartment, or even to take out an insurance policy, you are establishing credit.

Your credit files are often stored in 3 major credit bureaus:

In the United Kingdom you can also go to CallCredit for your credit files.

Two other resources you may wish to check out if you live in the UK is called The Credit Agency. The other is a pretty good article on Article Base called - “About Credit Bureaus And Online Personal Credit Reports”.

Just so you know, there are laws that protect us to a degree when it comes to credit repair. To understand all the legalities, as well as how your credit file affects you, it is very important when it comes to repairing your credit history.

In the United States, Credit Bureaus are coordinated and monitored by the Federal Trade Commission beneath the requirements of the Federal Fair Credit Reporting Act (FCRA) and follows up with all the various State Laws. If you have credit files that contain inconsistencies, the Fair Credit Reporting Act protects you in the sense that it requires the credit bureaus to delete or make certain information obsolete on your credit file.

This protection can come be very handy if you find that you have become a victim of Identity Theft. It may also come into play for any false accusations made against you. The law requires that Credit Bureaus to list accuracies on credit files by gathering appropriate information against you or on your behalf.

It’s also good to know that this protection regulates these credit bureaus by:

  • - only allowing them to list negative reports against you for a limited time
  • - limiting who and who cannot access your credit files

You should also note that when applying for a loan, license, public assistance, insurance, apartment rentals and even courts, these entities can request your credit files without your consent. Utilities are different. Utilities such as heat, and electricity are a necessity and as such Utility providers cannot deny you service even if you have bad credit.

What have you learned here?

There can be many types of services that are able to check your credit files. But again, you need to be aware that every time your credit is checked, points that count against you are put on your credit files. These points can add up and if you have enough points your credit rating can certainly be affected, so you need to be careful what you want to apply for and to only apply for what you need.

Understanding your credit files is a crucial step to repairing your credit. If you do not have good credit and are trying to repair your credit rating, then it is important for you to obtain copies of your credit files. Learn to understand the credit score on your files and apply for credit only after addressing any risky issues you may find on your credit reports.

Next:  Part 4 – Observing Your Bills | Secured and Unsecured Debt

* * * * *

Your email:

 

Other Related Articles:

Filed under: Credit Repair

Like this post? Subscribe to my RSS feed and get loads more!