Despite the fact that these credit bureaus collect and maintain personal financial data on nearly every American, these bureaus are in no way related with the United States Government. In fact, these bureaus are simply private, for profit companies whose sole motivation is to make a profit by selling your personal financial information in the form of a credit report.
The customers of credit bureaus who buy the credit reports, the same lenders that you rely on to grant you credit, have established relationships with the bureaus to continue to provide information about your credit with them. The bureaus then take this information about you from all of the lenders and put it in a database that they market and sell to other lenders in the form of a credit report. Thus, if you make a late payment, your lender quickly reports it to at least one of the three major credit bureaus and it almost instantly shows up negatively on your credit report creating a harmful effect to you. In fact, it gets even worse. Your credit report is not limited to your current financial condition, but actually contains the personal financial records of everything you have done over the past several years. For example, if you made a late payment even five years ago, but have paid ever other bill since then on time, it does not matter because that one late payment will continue to show up on your credit report seriously damaging your credit score.
Armed with all of your personal financial information, credit bureaus then sell this information to credit grantors, who interpret your credit report to determine whether you are a good financial risk. The key to good credit status is keeping the negative items that appear on your credit report to a minimum so tat credit grantors are more inclined to extend you credit at the best available rates.
The bottom line is that in the field of credit, the so called permanent record that is so often mentioned can in fact, be true. Your credit report is a record of your financial past, for good or bad. With regards to the permanent nature of this record, that is entirely up to you. If you choose to do nothing about your credit report, then it is in fact a permanent record. If you choose to have the Credit2NV.com Team fight to ensure your legal rights are being enforced to the fullest extent permitted by law, then the negative items on your credit report may not in fact, have a permanent damaging effect on your credit.
What shows up on my credit report?
- Collection Accounts
If your account is referred to collections or a collection agency, this will appear directly on your credit report. These accounts can appear as paid or unpaid accounts. Regardless, any type of collection account is considered VERY negative by all lenders. - Inquiries
Each time a potential lender or credit grantor looks at your credit report, it is recorded on the report as an inquiry. If you have significant number of inquiries over the last two years, this may have a negative impact on your credit as the lender will become nervous that you are attempting to get too much credit. - Court Records
Court records can include things such as bankruptcies, liens, judgments, divorce, satisfied judgments and satisfied liens. These court records are considered negative by all credit grantors. - Merchant Trade Lines
These are the traditional items that you think would be on your credit report. They include your regular credit lines like credit cards, auto loans, and mortgages. Information on late payments, if the line was part of a bankruptcy, charged off, or put into repossession will be considered negative by all lenders.
Will my negative items stay listed forever?
No. The federal Fair Credit Reporting Act and the Fair and Accurate Transactions Act require that most negative items be deleted from you credit report by the end of seven years, except for bankruptcy, which can remain on your report for up to ten years. Inquiries can remain on your credit report for up to two years.
Can I view my credit report?
A lender or credit grantor is usually not permitted to show you your credit report. However, you are entitled to purchase your credit report from the bureau for a fee. For the vast majority of consumers who obtain their credit report from a bureau, it is extremely difficult to fully understand what your credit report truly says, because they use a special set of codes to report the data. You may also get your FREE annual report at www.annualcreditreport.com. This is the only trusted site we suggest to get your free credit report from.
What if I only have a small amount of bad credit?
The smallest amount of bad credit can often result in a denial. In fact, just one late payment may be enough. Even worse is the reality that even a large amount of positive credit cannot offset a small amount of negative credit. Unfortunately, the smallest amount of negative credit can significantly hurt your credit rating and result in the loss of thousands of dollars per year, and many missed opportunities.
Who sees my credit report?
If you are one of the seventy-five percent of consumers with negative information on your credit report, it is important that you that this negative information is being used more and more frequently to define your financial worthiness. Obviously, those granting you credit (i.e. for a loan or credit card) will look at your credit report to see your financial history. More and more often, other non-financial groups are also looking at your credit report to determine if you are a worth individual. Employers are increasingly using credit reports to determine if you should be hired, and insurance companies are even increasingly reviewing your credit report to determine whether to extend you coverage.
What is a charge off?
A charge off is the term used once you are so late on an account that the creditor determines you are likely not going to pay the debt. Once the creditor reaches this conclusion, they write the debt off as a loss for tax purposes. However, the creditor will continue attempting to recover the debt by selling the debt to a new creditor, or by sending it to collections.
Bad Credit vs. Good Credit?
Bad credit can be very costly. You may not realize it, but every 1% point on a thirty year mortgage is equivalent to 25% of the amount financed: $100,000 loan at 7% will cost you $25,000 more over thirty years than $100,000 at 6%. It cost far more to do nothing about your credit problems than it does to optimize it.