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Saturday, January 31, 2009

Credit Report: True Recognition of your Creditworthiness

Today everybody has finally given in to the indispensability of loans whenever we take any decision related to spending money to fulfill any need which does not come within our financial capacity. You can’t do without credit. To purchase a home, you need a mortgage loan. Planning to buy a new car? It is time for an auto loan. To go for higher studies, you require a student’s loan. And credit report here plays a vital role in raising or lowering your possibilities of getting loans at a lesser interest rate when you apply for any. Creditors want to check your creditworthiness by taking copy of your credit report from the credit bureaus before giving you credit. Your credit report copy provides them with a complete history of your repayment and management of all loans you have taken so far. I want to give a quick but authentic lesson on a credit report, to give you a clear idea of every nook and corner of your credit report and how to obtain it free.

What your credit report includes

A credit report has basically 4 different parts which contain your personal and financial (loan history and repayment related) information that your creditors report to the bureaus. These are those parts:
1. Personal Information: This includes -
a) Your name, phone number and correspondence address info.
b) Your date of birth
c) Social security number
d) Names of current and previous employers.

2. Inquiries: In this section, a list of all those who have accessed your credit report so far including your lenders is given. Inquiries include:
a) Soft inquiry (involuntary): When you yourself check out your report, or when the creditor checks your report for promotional purposes, soft inquiry occurs.
b) Hard inquiry (voluntary): When you apply for any loan, hard inquiry is carried out when your possible creditor pulls your report and thoroughly goes through your previous loan repayment and default history to find out your loan reliability and exact financial position.
Only hard inquiries are shown to lenders when they order your copy. Soft inquires are shown when you ask for your credit report.

3. Tradelines: This section contains following things:
a) Opening date of your account
b) Types of credit accounts or loans you have
c) amount of loan (your Credit limit)
d) Complete account of Payment particulars, like-late payments, charge off, default etc.
e) Your account balance Account Status.

4. Public collections and records: It includes –
a) Wage garnishments
b) Liens and judgments, bankruptcy, foreclosure
c) Reports from State and County courts
d) Collections and name and contact detail of CA

How to get your free credit report
According to Federal financial laws every person has the right to get a free copy of his credit report from any or all of the bureaus, once a year. Under any of the following situations also you can get a free report:
• You are currently unemployed and plan to look for a job within 2 months.
• You are on some kind of welfare.
• Your loan application has been rejected (order report within 60 days of rejection).
• Your report shows inaccurate loans particulars due to id theft or fraud.
You may anytime call up at this toll-free number: 1-877-322-8228 to order a free credit report. You can also request for a free credit report at which is the central website set up by the bureaus or fill out the Credit Report Request form available at the website and mail it. The address is:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

However, in free credit report credit score of a person is not given; if you like to get your credit score, you will have to buy it for $10.50. To get instant access to your free or paid credit report, you can request for it online. Otherwise you need to give your personal and financial details to the and place your order. Then bureau takes 15 days to send the report.


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