Credit Score-Not Just a Number

Posted on October 5, 2012. Filed under: Toby Olsen |

Credit Score:  Not Just a Number

 Almost every application for a loan, credit card, or lease, is followed by a check of your credit report by your lender or landlord.  Aside from the score, the credit report tells much more about your financial picture.  Because this is such a valuable tool for lenders, it is important that you know what is on your individual report.  Every consumer is able to obtain a free copy of their credit report each year.  There are four important aspects to inspect when reviewing your report.

 1)  Address

Your report will have your current and former addresses listed.  The appearance of an address that is unfamiliar or incorrect could be a sign of a possible fraud.    

 2)  Collections

In my communication with customers, this is the most common surprise that people find on their reports.  You may have shared a bill with a roommate that was unpaid and you were not notified.  There may have been a medical bill that was assumed to be covered by your insurance provider.  These problems can be corrected, but it is important to find them as soon as possible.

 3)  Closed Accounts

Even if a loan has been paid for a few years, the history of payments is still on the account.  Many accounts, such as credit cards and interest free purchases from merchants, stay open after the balance is paid.  The consumer needs to request that the account be closed.  Looking at your report can help you determine what accounts are still active.

 4)  Recent Inquiries

Any time a company or individual “pulls” your credit, it is disclosed on your report.  This is a valuable tool to see who has looked at your report.  Any inquiries that you do not recognize could be an indication of fraud and should be looked into further.  Too many inquiries can hurt your score.  When purchasing an item and looking for financing, you should ask how many different companies will be looking at your credit report.

 If and when you decide to look at your own report, it may be confusing to disseminate.  Please pay special attention to the four key factors listed above.  You are welcome to contact me at the Denmark State Bank with any questions regarding your individual report.

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