Tips To Help You Understand Your Credit Report

When it comes to financial health, your credit report is one of the most pieces of information

. Understanding all it contains and how it can relate to applying for future credit is important.

Your Credit Report Says A Lot About You

Through your credit report, a lender will have an idea on the kind of borrower that you are. Collection requests, bankruptcies, and late payments are among the things that it can track. Other things that these reports can track are accounts that were opened and closed, on time payments, and loads that are paid off. Because it's your history, it can affect your future.

Too Much Credit Can Hurt You

Believe it or not, regardless of having no late payments and carrying a low balance, it can hurt you to have too many credit card accounts on your credit report. The reason is because you have the ability to run high credit card bills and it causes the lenders to worry in case you accrue a large debt and won't be able to pay them back because of all the other bills you need to pay. If you have credit cards in your wallet that you seldom use, close the accounts. For instance, when buying gas, use one gas credit card instead of three or you can use a general credit card to purchase gas.

Things You Don't Know Can Hurt You

Since there's a lot of information about you that's compiling, it's possible for credit card reports to contain mistakes. Perhaps you have closed an account that your credit report states is open or you have paid off a balance that is still listed. You need to contact the credit bureau to have any inaccuracy corrected.

What You Don't Do Can Hurt You

Costing you more than late fees are missing credit card payments. Having late payments reported on your credit report can keep you from getting a home loan or even buying a car and once accurate negative information is on your credit report it takes 7 years to get it erased. It is important to make your payments and make them on time and to carefully consider every purchase you place on a credit card.

by: Kelly Wang

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