Bad Credit Report
Creditors screen credit applicants very closely. They are screened for risk and the major decisive factor in granting credit is your credit report. A bad credit report can hinder you from upgrading credit, purchasing a home or car and even insurance. In some instances if you are granted credit with a bad credit report your interest rat will be much higher than normal.
Your credit report is important to review it periodically is a good idea. Mot lenders and creditors reliably report information to the credit bureaus. However billing errors can occur and reports can be negative. If this happens you will have to dispute the discrepancy with the lender or creditor. If other information is inaccurate regarding your credit a credit dispute will have to be filled with the creditor to get the bad credit report corrected. Many businesses exist that enable the consumer to obtain a free credit report and online credit reports. This makes it possible for the consumer to be able to monitor activity on the report and prevent the occurrence of any bad credit reporting that is in error or so the consumer can begin to improve their credit rating. It is important to do regular checks on your credit in case any errors occur. When applying for credit a consumer's credit report is pulled from one of the three credit bureaus, Trans Union, Equifax or Experia, and the credit report is evaluated and scored. Thee credit bureaus keep your personal credit history sometimes for a period of up to ten years. It is important to correct and resolve any credit disputes and keep the paperwork for this reason. If a consumer had bad credit and took measures to drastically improve it over time this is taken into consideration. Bad Credit history is on file for ten years so it is best for a consumer to never incur bad credit.
As well as credit history files on loosed or inactive accounts is kept ten years from the date of last activity. Derogatory accounts and remarks regarding a consumer's credit are accessible for seven years from the date of original delinquency. Public records are on record for seven years from the date of payment or indefinitely if the Public Record is an unpaid tax lien. Chapter 7 bankruptcies are kept on credit reports for ten years from the date bankruptcy was filed for. If a consumer has a bad credit rating it is important to repair or improve the credit if they wish to secure any loans or credit in the future. Bad Credit agencies are available to counsel consumers and assist with credit repair.
There are basically ten items that are flagged as bad when evaluating a credit report. Credit inquiries by creditors or lenders. The number of times that your credit report has been pulled up is a basis for bad credit. Creditors looking at your credit report may note a large number of inquiries and assume you are trying to secure credit everywhere and anywhere. If the inquires result in a denial of credit that can be seen as negative by creditors or lenders also. Credit rejections are not viewed in a positive manner by potential lenders.
Late payments are not precursors of good credit. If you are late on one payment and it can be explained it can be taken into consideration. However potential creditors do not see a history of late payments in a positive manner. Grace periods exist and if it is recorded on your credit record to the credit bureau as late it is considered an extensive amount of time. Furthermore the information given to the credit bureau in most instances is recorded with the number of days payment was late.
A credit report is considered bad when past due and unpaid payments appear. The creditor looking at your report will assume they will be pad late or not at all. Court judgements are negative indicators as are any collection actions. The creditor does not want to go to court to receive payment and a bad credit report with these indicators on them is almost always denied.
Loan defaults and repossession are indicators of bad credit history and will damage your credit score. A creditor will almost never deal with a consumer who has defaulted on a loan or had repossession. To repair your credit the default or repossession must be paid for and documentation secured to prove it. This does not necessarily mean the credit rating will improve or the creditor will loan to you.
A foreclosure indicates a very bad credit risk. These are very damaging and difficult to repair. They can appear on a credit report for seven years from the date of foreclosure. Even if the consumer has stellar credit otherwise, a foreclosure can almost guarantee rejection if some form of credit improvement is not taken into action. Bankruptcy is also an indicator of bad credit. Bankruptcy is used to bail out of debt so it is not seen in a positive aspect by lenders. Bankruptcy can appear on your credit report for ten years from the date of filing.