Credit Check

It is important for everyone to stay on top of his or her credit standing by regularly checking and updating their report. It is imperative that we perform regular credit checks of our own record to avoid any erroneous information from being added to our report. This also helps keep us aware of any questionable or fraudulent activity that may result from identity theft. With the recent tightening of the credit market, lenders, banks, and creditors are more likely to evaluate your standing based on the stability of your income, your ability to make timely payments, your debt-to-income ratio, and payment history when considering you for a loan or credit.

These days of failing mortgage institutions and rollercoaster economics, anyone can find themselves in a financially troubling situation for a myriad of reasons. It is in these financially unstable times that we have to be even more vigilant about what is on our report and make sure that we straighten out any discrepancies in our report. A poor payment history can be more damaging than a bankruptcy filing. That is the main reason why it so important that we fix or explain any damaging information on our report. Credit reporting agencies have the right and the responsibility to show an accurate history of our financial records. However, it is up to us to correct any errors on their statements.

A good rule of thumb to keep you credit in check is to stay away from high-interest loans or credit offers. Do not apply for every card or loan that comes your way. The more open credit you have the more damaging it is to your overall credit. According to the Fair Credit Reporting Act, a consumer credit report may include information on Chapter 7 and 13 bankruptcies for up to ten years from the start of the case. One major consumer-reporting agency eliminates Chapter 13 data after seven years though it legally is not required to do so. Other information usually remains on the report for seven years.

Tips to keep your rating in good condition include:

• Correct any errors in your report.
• Write letters to the reporting agencies explaining questionable scars.
• Talk to your banker or creditor if you run into financial hard times.
• Open a savings account and contribute to it habitually.
• Try to pay any outstanding debt as fast as possible.
• Pay your regular household and other bills on time.
• Stay away from high interest traps.
• Limit your number of credit cards or open credit.
• Try not to increase your debt to income ratio.