As lenders become more cautious in giving out loans to prospective borrowers, credit reports are now useful more than ever.

A credit report lists down your history of credit accounts and your payment activities over the years. A good credit report shows the creditworthiness of a person. This spells favour inclining towards gaining credit through loans and mortgages. A bad credit standing would mean, of course, poor credit report that can surely lead to a series of loan rejections. Here is basically how the credit report works and ways to improve it:

If you are above 18 years old and have obtained loans through personal or credit card loans, aside from student loans, this automatically enlists you in credit reports. As you get loan offers, it only means that lenders have done a background check of your credit report and decided to offer you loans.

Aside from your repayment history, a credit report also contains helpful information for lenders to assess your eligibility to borrow and pay. Data include court information for non-payment and bankruptcies.

Lenders will also verify your current address as a measure against fraud by whittling electoral roll.
Lenders can also verify your credibility by contacting your associates in your joint accounts with other people in mortgage and loan agreements.

Lenders also contribute information to your credit report, but majority will only give details of missed payments.

If you want to, you can also let lenders see your credit report. Credit scores change as your financial situation changes. You gain a point whenever you pay on time and a deduction when you miss to pay.

Check your credit report from time to time, so you can see your financial progress that will allow you to up your credit scores more. It is important to view your credit report first if you want to apply for new credit. New credit accounts are not merely mortgages or credit cards but also credit lines for utility bills and catalogue accounts.

Regularly monitor your credit report to protect yourself from identity theft. With the advent of technology, it is the most common crime nowadays. Credit shoved on you does not mean you have to grab it instantly. Do not try to improve your credit history by constantly availing of any loans. You can improve your credit report by simply meeting your financial obligations on time.

In cases of payment default due to emergency situations, contact your credit reference agency; explain the situation, and give proof. They will reflect your explanation in your credit report and lenders will be able to see it, too.

Alex Crothers of Mortgage Snout offers consumer advice on the importance of good credit rating when applying for credit and loans.

By Alex B Crothers

Repairing your Credit

Legal Credit Repair Methods

Article 7 of 9 - Last article, we discussed IF you can remove bad credit. Now, we will discuss HOW you can do so.

To get a better understanding of what constitutes legal credit repair, it might help to begin with a review of certain illegal practices that occasionally occurs when individuals attempt to repair their credit.

Illegal: Changing your social security number to obtain a clean bill of credit.

Illegal: Disputing every item on your credit report, regardless of nature. The Fair Credit Reporting Act specifically states that only items that are unverifiable, inaccurate or misleading should be disputed. Items that are clearly yours, and accurately reflect your credit history should not be disputed.

Illegal: Charging for services that have not yet been completed. This is to protect the consumer from fraudulent companies that charge for services that never get completed.

If a credit repair company should recommend any of the above, report them to the authorities.

So, what exactly is Legal Credit Repair?

Legal Credit Repair consists of removing the negative items on a credit report. There are a few different methods of going about this. The most common and effective methods of correcting your credit are:

"Goodwill" Negotiation Negotiating directly with creditors asking them to "please" remove negative items from your credit reports is a viable method of credit repair for mild late-pay accounts. There are no laws that require that negative items to stay on your reports for any amount of time, and creditors have the ability to simply remove these items if they see that it could somehow work to their benefit, even if that simply means a pleased customer.

Credit Disputation The Fair Credit Reporting Act gives you the right to contact credit bureaus directly and dispute items on your credit reports. Just as in a court of law, you have the right to plead "not guilty" to negative information on your credit reports and leave the burden of proof to the credit bureaus. You can dispute any and all items on your credit reports that you feel classify as inaccurate, unverifiable, or misleading. If the bureaus can not verify that the information on your reports is indeed correct, then those items must be deleted.

Can Debt Management/Debt Consolidation companies help consumers restore credit?

Debt counseling services assist consumers who are over their heads in debt. Often, these counseling services provides a beneficial service to the consumer. But some have allegiances to the credit bureaus. You should know, if you decide to leave a debt managment program before you have finished, they can list your failure to complete the process as a negative listing on your credit report. When you participate in a program, your creditors will sometimes (though rarely) note it on your credit report. The fact that you resorted to a debt counseling program is a potential red flag for prospective credit grantors. Remember, paying off your debts is a step in the right direction, but it does not restore your credit.

How To Get A Copy Of Your Credit Report
By Connie Barker

One of the most important things that you can do to maintain an accurate credit score and report is to request a copy of it on a regular basis. Credit reports are usually defined as a document that summarizes your financial reliability and many lenders and other entities regularly report your financial performance to credit reporting agencies during the year. By requesting a copy of your credit report every year or even every six months, you can determine if all the information in the report is accurate, and if not be proactive to change it. Here are tips on how to get a copy of your credit report. 

There’s Not Just One Credit Report 

While most consumers talk about getting “a” credit report, there are actually three different credit reporting agencies that each create their own credit report. While there are usually quite similar to the information included in the report, sometimes, they can have conflicting information and inaccuracies. This is why it is important to request a report from each individual credit bureau. The three major credit bureaus include; Experian, Equifax and Trans Union. 

It’s Easy to Request a Credit Report 

For consumers that are interested in what their credit report says about their financial history, you will be happy to know that each of these three major credit bureaus are required by law to provide you with a free credit report once a year. If you would like a report more than once each year, you will have to pay a small fee. You can easily request a free credit report by visiting the major 3 credit bureaus web site or calling them directly to request a report. 

Why Request a Report 

It is extremely important to request your credit report each year to determine if any inaccuracies are present. Mistakes on your credit report can result in the rejection of a mortgage or car loan. If you are planning on making a large purchase it is always a good idea to view your credit report before making your purchase. 

You should also request a report if you believe you are a victim of identity theft. One way to reduce the damage done by identity theft is to contact the three major credit bureaus and request that any new loans and credit cards that are applied for should first seek proof of identity. Another way identity theft can be curtailed, is when you receive your credit report, you can easily look at it to determine if loans or credit cards have been taken out fraudulently. 

About the Author: Connie Barker is the owner of a credit report site dealing with Credit Reports Online