When the dust settles from all your financial problems, learning how to repair credit should be your next goal. Studying and understanding the different sections of your credit report is necessary if you want to know what strategies are required to do it yourself. When you order your report, it’s also a good idea to order your FICO score so you have a reference point to see how your repair efforts are doing. Let’s review the five main parts of your report:
1) Personal Information
This part of your report shows your name, any aliases you’ve gone by, Social Security number, and employment record. Every time you submit a new application for credit, the bureaus update your file. This is one reason it’s so important to be sure your applications are filled out correctly.
2) Accounts Being Reported Monthly
You’ll find this to be the largest part of your report. This section contains information such as name of creditors, account numbers, type of account, date opened, maximum limit, current balance, and the payment history of your account. Only creditors who supply monthly payment history get reported here.
3) Accounts In Default
When you learn how to repair credit, this is where you’ll spend most of your do it yourself efforts. This section of your report contains any of your accounts that are being reported as delinquent or sent to collections. You should be able to view the creditors name, account number and type of account, delinquency status, and the month and date of your first missed payment.
4) Public Records
All local, state, and federal records are public information. Reporting agencies constantly update their files with the information collected from these sources. Land record data is also collected such as property liens. All lawsuits, judgments, liens, foreclosures, and bankruptcies are listed in this section.
5) Inquiries
This area of your report lists all creditors who have requested a copy of your record within the last 2 years. Inquiries can be divided into soft or hard. Soft inquiries occur when 1) creditors view your report for marketing purposes such as new card applications, 2) when a creditor wants to see your payment history, and 3) when you request your own report. Hard inquiries occur from creditors you apply for credit with. It’s important to keep the number of hard inquiries to a minimum as creditors shy away from applicants with too many of these. This alerts creditors to the fact you may be desperate because other creditors are turning you down.
Learning how to repair credit may seem like an overwhelming task, but with persistence and the right strategies, you can achieve good results when you do it yourself.
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