Credit Reports Can Help And Hinder

Although the FICO score provides a quick summary of a potential borrower's financial health, it's the report that offers all of the details that lenders or creditors want to examine in detail. Previous debts, installment loans and mortgages are listed there, along with debt filings, property tax liens and so on. If you have a bank card, it's listed. If you had an auto loan that you paid off five years ago, it's listed, and the report will note whether you paid on time and completely.

Bad entries on your credit report will consist of things like unpaid property tax liens, debt filings, and unpaid car or truck loans or credit card debt. These are "red flags" that are likely to catch the attention of financial institutions rather quickly. If you have a number of negative entries and a so-so credit score, you may find it difficult to obtain additional credit. On the positive side, bad entries disappear from your credit report after seven years, with the exception of Chapter 13 bankruptcy filings, which stay for a full a decade.

Good entries on your report will include repaid debts, current credit accounts in good standing and dormant accounts. Contrary to common belief, positive entries do not appear on your credit report indefinitely. Open accounts remain on your report for as long as you keep them, with extra notations if you have a history of paying late. Closed accounts stay on your report for a maximum of a decade. After that, they are removed from the report.

The key to a good credit report is always paying your bills in full and on time. Immediate payment of your bills when they are due will also help you sustain a healthy credit score. If you have negative entries, they will be removed in a few years, but positive entries from open credit card accounts might stay indefinitely. It is worth your while to do your best to pay your bills promptly so that you might keep your credit report in tip-top shape.

©Copyright 2007 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing , a firm devoted to affiliate marketing, and Debt-Stopper.com, a site about debt consolidation, personal bankruptcy and other financial matters.

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