Credit Reports

A credit report contains information about your past debt, including: credit issuers you borrowed money from, repayments, punctuality in sending your payments, public records such as bankruptcies or liens, and credit inquiries. Credit reports are documents compiled by credit agencies for the purpose of approving loan applications you make, so it’s essential to have a good credit report, especially when purchasing big ticket items such as homes, cars and mortgages.

If you want a good credit report and credit score, keep these three points in mind:

  • Pay your bills on time.
  • Keep account balances low.
  • Take out new credit only when necessary.


5 Tips for Maintaining a Good Credit Report

There are certain facts about credit reports that you should know to get the best possible credit rating. Here are five of them:

  1. Pay down the balances on credit, and pay on time.

    While this isn’t an instant cure, paying off the balances on your credit lines over a two-month period could boost your credit score. Paying every bill on time is a good practice, but if you want the best credit record, pay your debt before it’s even due. Credit agencies will love you for it and will probably give you more credit because of it.

  2. Don’t max out one card; spread it around.

    Spread out debt across several cards instead of simply maxing out one card. Think of it this way: Utilize 20-30% of your credit on several cards instead of 90% on one and 0% on others. This method distributes the debt over different accounts and could help improve your score.

  3. The bad stuff lasts seven to 15 years.

    Positive items in your credit report last indefinitely and raise your credit score. But negative items also last a long, long time. Depending on the nature of the item, negative information in your credit report has a shelf life of seven to 10, sometimes 15, years. These include missed payments and most public record items such as bankruptcies, judgments and liens. The stuff that lasts 10 years? Chapters 7, 11 and 12 bankruptcies. And then there are unpaid tax liens that stick around for a jaw-dropping 15 years.

  4. Dispute errors on your credit report.

    Credit reports will inevitably contain errors, and it’s up to consumers to dispute them and have them removed. The Fair Credit Reporting Act allows you to dispute inaccuracies at no charge. In fact, you are entitled to free copies of your credit report after you file a dispute to check that errors have been fixed. Here are some errors to look for: incorrect accounts, late payments that were actually paid promptly, and debts older than seven years that are still reported.

  5. Review your credit report annually.

    Since you are entitled to one free credit report every year, you should take the chance to review it annually for mistakes or signs of identity theft. Remember, if you aren’t vigilant, you’ll only find out about the errors when something bad happens. Also, keep in mind that your credit report doesn’t contain your credit score, which is the numerical summary of your credit report. Credit reports are free; credit scores cost money to view.

General Disclaimer: The articles on this website are for informational purposes only and should not be used as a substitute for legal advice

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