June 19, 2009
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News: Fixing Your Credit Report
When we were young, we did many foolish things with little or no concern of how our actions would affect our future. Immaturity, I believe, is the correct word. Fortunately for most of us, we escaped most of those careless episodes with little or no backlash. However, one area with virtually no escape route involves those carefree attitudes toward paying car payments and credit card payments on time. And, what about those student loans? Add them all together and the end result is that many Americans begin their young adult lives saddled with high credit card debt and low credit scores. Looking to find that comfortable inviting home to call our own, we begin the process of seeking out a mortgage lender. Suddenly, a recoiling of our lack of financial responsibility in managing credit card debt and auto loans threatens all our hopes and dreams of owning that perfect home. What about that credit score? Where does it come from and how does it affect your ability to finance a home?
There are three major credit reporting bureaus; Equifax, TransUnion, and Experian. All three collect credit data on individuals. They gather, analyze, and deliver information to organizations considering forming a financial relationship with an individual or business. Lenders report the details of your credit card and loan contracts to the bureaus, and then regularly update your payment history. Banks look at many things when determining your risk factors. Excessive credit card debt and loans will pull your score down just as quickly as irresponsible payment histories. The credit bureau compiles all the details to form your final credit score know as a FICO score. The final number assists lenders in determining how likely it is that you'll repay your debt on time. The higher your credit score, the better leverage you'll have when negotiating that mortgage deal.
Ok, so you didn't pay your credit card and loan payments on time consistently, There are ways to repair those careless mistakes from your youthful days. It won't be easy, but with diligence and determination, you can make it happen. Of course, you could go to an agency that would help for a small fortune, or you could just do it yourself. Visit the article series "Fixing Your Credit" to learn more about how to repair your credit.