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Your Credit Report Card Terms of Use:

Your credit report (sometimes called your credit history) contains personal information continually updated from many sources, including the companies that have extended you credit.

Whenever you apply for a credit card, mortgage or car loan, the lender wants a copy of your credit report. If your report is okay, you will get that loan or credit card. If the report is not okay, your application will be denied.

In addition to your credit report, lenders access your credit score to determine the risk of lending you money or extending credit. For additional information, see Keeping Score of Your Credit Score.

Who makes up my Credit Report? And how?

There are three major credit bureaus: Equifax, TransUnion and Experian who make up credit reports on over 180 million Americans based on information provided by creditors.

Big companies like Sears and Wal-Mart, as well as financial institutions like credit unions and banks subscribe to one, two or all three credit bureaus.

They supply the bureaus with information on every mortgage, credit card account, car loan and individuals’ payment habits (if you make the required payments, if you pay on-time, etc.).

Lenders also get your credit history from one of the three bureaus. The bureaus don’t actually keep a report on you, but they can assemble one within minutes by plugging in your Social Security number and using data they’ve received from their subscribers.

Who’s allowed to read it?

The Fair Credit Reporting Act ensures that only you and people you give permission to are allowed to read your credit report. Besides lenders, employers often want a credit report before they hire you, especially if your new job involves handling money. Sometimes auto and life insurance companies want credit reports before deciding to insure you.

What’s in my credit report?

Your credit report includes your name, Social Security number, date of birth, address, employment, credit accounts and history, public records (liens, bankruptcies, judgments) and credit inquiries.

Your credit report does not list your salaryor job history. It only has information about what you owe, who you owe it to, and if you pay it back on time.

For example, your credit report includes information about your payments and balances on your mortgage, car loans, and any credit cards; facts from public records such as child support payments or other judgments; records of late payments; and any debts that you did not pay off.

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Your Credit Report Card Terms of Use:

Why was I denied credit?

Credit is often denied if you already have too many credit cards, even if you are not using them.

For example, if you have five cards with a $5,000 limit on each, you already have the potential of borrowing $25,000, even if you only owe $200 on them.

If two or more credit cards are near the limit (within 80%), you may be denied credit. Likewise, if you carry balances on four or more cards.

Late payments, especially ones more than 60 days’ late, may cause trouble.

You may be denied because of negative public records of liens, bankruptcy, and so on.

If you have not kept the same job and the same address for at least two years, you may be denied credit.

If too many lenders and employers have asked for copies of your report, you may be denied.

If you never have taken a loan or paid with credit, you may be denied because you have no history of paying a loan back.

Recently divorced or widowed women may not have credit history in their own names, and therefore get denied.

How can I clean up my credit rating?

The best way to improve your credit rating is to be punctual with all your bill payments every time. In this way, you create a positive credit history. Lenders are most concerned about your recent payment history, even if you’ve had payment problems in the past.

If you fall behind on payments due to illness, unemployment or family issues, be sure to contact your creditors to work out an agreeable payment schedule.

Write a letter of explanation to attach to your credit report that tells your side of things. Make sure that negative things on your credit report are removed on time.

Legally, a bankruptcy can stay on your record from 7 to 10 years; lender inquiries, 6 months; and employer inquiries, two years.

How do I check on my credit report?

If you’ve been denied credit, insurance or employment as a result of your credit report, you are entitled to a free copy of your report.

Other cases where you’re entitled to a free credit report are:

(1) if you live in one of the states that require residents have free access to one credit report per year;

(2) if you believe identity fraud has created inaccuracies on your report;

(3) if you are applying for unemployment benefits; and

(4) if you are receiving welfare assistance.

You can buy a copy of your credit report through any of the three credit bureaus. It's advised that you check your report at least annually for errors that could damage your credit.

For more information on credit reports or to buy a copy of yours, go to: Experian.com, TransUnion.com or Equifax.com.

See what you learned.

Check out "Keeping Score of Your Credit Score"