Guest post by Vielka Burey-Jacas (@VielkaBurey)
It is increasingly important to purchase your home, automobile at a reasonable interest rate. In addition, a lot of companies like to obtain the credit report to see your responsibility and pattern . Some companies do not extend an job offer if your credit is not satisfactory.
Having a lot of credit cards with a lot of debt , even though they are pay on time , do not show a good strategy , lenders see this as a sign of weakness and compare ratios with the savings you have. Having credit available and low ratio of balance it’s a sign of good financial understanding and management.
The average credit score in the nation is 723.
Your credit report it’s a summary of all the accounts you have under your social security number. there are three major type of accounts:
- Real Estate: mortgage loans
- Foreclosure are included in this reports . A foreclosure it’s a negative record on your credit because it shows that you were unable to make the mortgage payments and that you not just defaulted on the loan but that you are about to lose your home.
- Installment: accounts with fixed terms (i.e. 60 months) , car loans
- Revolving: Credit card accounts such as department stores with open terms and varying payments according to your balance.
- Other type of accounts are Student loans.
Your credit report includes all the accounts that are open or close, past due accounts, balances and collection accounts. Collection accounts are accounts that are beyond past due and have been given to an agency to try to collect the debt. usually, the collection agency, receives commission for the accounts that they get to be paid. collection accounts are in your report for 7 yrs , bankruptcies 10 yrs.
There are three major credit bureaus: Equifax, TransUnion, Experian. these reports contain your history including your personal information: name, address, date of birth, addresses ,etc. this part, its use to verify your identity.
- Credit Repair: How to Help Yourself [Federal Trade Commission]
- Reparación de Crédito: Cómo Ayudarse a Sí Mismo [FTC en español]