Poor Credit Rating

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If you have never taken your credit report seriously, it can become difficult in understanding your credit score. Looking at the numbers, credit scores vary from 300- the lowest, up to 850- the highest. To get the most nominal rates from lenders, you are required to have a rating of 750 or above. Once you have your reports on hand, you will have enough data regarding your debts.

There are four sections in a credit score report:

1.    Identifying information - name, address, birth date, previous addresses, driver’s license number, employer, the name of your spouse and social security number are considered the basic identification information.

2.    Credit history - Your accounts are classified into these groups: Real Estate, Installments, Revolving, Collection, other. Each account will show the creditor/lender’s name, and also the account number, the account opening date, account type, amount owed, account status, etc. “Charge off” and “Debt Collection” are destructive, as these bad credit scores stay on your report for 7years.

3.    Public records - Things that might show up in this section include: bankruptcy, divorce, a foreclosure, judgments, civil actions, tax liens, or other legal actions taken that would negatively impact your credit scores. These are the most serious offenses for your credit score and will be on your report for ten years.

4.    Inquiries - This involves listing of all third party inquiries into your credit scores. “Inflexible inquiries” are generated by you when you complete a credit or loan application, whereas “flexible inquiries” are generated by companies that want your business or collect a bill from you.