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Your guide to Credit Report and Analysis
It is very important to get your credit report and analysis. Why is this important? For one thing, if you're thinking about buying a house or applying for credit for any other big purchase, you'llneed a clean credit report, and it's always best to get your credit report and analysis before your lender does. This will give you an opportunity to clean up any discrepancies or errors, which arefairly common, and which can throw a monkey wrench in the works if not resolved.Ideally, you should get your credit reportand analysis once a year with each of the three credit bureaus:
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Equifax
– (800) 685-1111, www.equifax.com
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Trans Union
– (800) 888-4213, www.transunion.com;
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Experian
(888) 397-3742, www.experian.comYou're entitled by law to get your credit report and analysis for free from each of these threecredit bureaus once a year. You can get all three at once or spread them out over the year. If youget your credit report and analysis more frequently than that, each report will cost no more thanaround $10 and in some states considerably less.If you've been turned down for credit in the last 60 days because of something a lender saw onyour credit report, you can get your credit report and analysis free of charge. Lenders arerequired by law to notify you of this right if they deny you credit.When you get your credit report and analysis, review them carefully to make sure all the loansand credit accounts listed really belong to you, and that all the accounts listed as open areactually current loans or balances. If a loan you've paid off or a credit card that was cancelled isstill listed as open, contact the credit bureau and ask for your credit report to be corrected.What Is the Range of Possible FICO Credit Scores and What Do They Mean?
FICO credit scores range between 300 and 850. Ratings are as follows:
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Excellent: Over 750
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Very Good: 720 or more
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Acceptable: 660 to 720
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Uncertain: 620 to 660
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Risky: less than 620How Is My FICOCredit ScoreCalculated?The formula used to calculate your FICO credit score includes information based on severalfactors:
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35% on your payment history
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30% on the amount you currently owe lenders
 
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15% on the length of your credit history
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10% on the number of new credit accounts you've opened or applied for (fewer is better)
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10% on the mix of credit accounts you have (mortgages, credit cards, installment loans,etc.)In general, when people talk about “your credit score,” they’re talking about your current FICOscore. But in fact there are three different FICO scores developed by Fair Isaac—one at each of the three main US credit reporting agencies. And these scores have different names.
Will your scored be different?
FICO credit scores range from about 300 to 850. It’s important to get your credit report andanalysis so you can understand what your FICO score is. Fair Isaac makes the scores asconsistent as possible between the three credit reporting agencies. If your information wereexactly identical at all three credit reporting agencies, your scores from all three would be withina few points of each other. But here’s why your FICO scores may in fact be different at the threecredit reporting agencies. The way lenders and other businesses report information to the creditreporting agencies sometimes results in different information being in your credit report at thethree agencies. The agencies may also report the same information in different ways. Even smalldifferences in the information at the three credit reporting agencies can affect your scores. Sincelenders may review your score and credit report from any of the three credit reporting agencies,it’s a good idea to check your credit report from all three and make sure they’re all right.Usually when you get your credit report and analysis from the credit bureau it will include aform for reporting any inaccuracies.Give as much detail as possible, and if you have documents that back up your claim, providecopies. By law, the credit bureau must investigate your credit report claim, but even if theydecide your credit report is accurate as it stands, you should continue to try to correct the report by writing a letter explaining your side of the story (not to exceed 100 words), which the bureauis required to provide to anyone requesting your credit report.
When deciding whether to approve credit, lenders take the following into consideration:
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Your payment history--do you pay bills on time?
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Have you had a bill referred to a collection agency?
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Have you ever declared bankruptcy?
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How much debt do you have outstanding compared to your credit limits? The closer your debt is to your credit limit, the less favorable.
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How long is your credit history? If you haven't had much of a credit history yet, prompt payments are even more important.
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Have you applied for more credit lately? Too many applications for credit has a negativeimpact on your chances for approval.
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How many credit accounts do you have? Too many is considered a negative.
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