What You Must Know About Your Credit Report - Factors That Impact Fico Scores

Before you apply for a home mortgage, you will want to make sure your FICO score is the best that it can be. However, there are some things about the way that credit is reported that aren't common knowledge. For instance, creditors actually pay the bureaus more money to upload information that lowers your credit than to add good information. In 2005, the credit bureaus' revenue from late payments went up from 1.8% to 30%! This means that if there's a black mark on your report, whether or not it's a fair one, the credit bureau is not motivated to remove it.

To be considered to have good credit, you have to have a score of 750 or better - with all three reporting bureaus simultaneously. This means you have to watch your score carefully. This includes medical insurance. If your claim isn't paid in a year by the insurance company, it becomes your responsibility, and can be treated as an unpaid debt on your credit report. Because of this and other things that could catch you up, it's important to check your credit at least once a year.


If at all possible, you should also invest in a credit monitoring system or service. If you're trying to improve your credit, either from errors in the past, or from a bad run-in with identity theft, there are some things you should do. For instance, did you know that black marks on your credit where the debts have been taken care of still show up, unless individually removed? This includes debts that have been satisfied by declaring bankruptcy. You could also see as much as a hundred and twenty points taken from your credit score if a single bill is more than thirty days late. It's recommended, if you want to improve your credit, that you pay all revolving credit card balances down to around thirty percent, one at a time. Then start over and pay each one off entirely.

Although it gets the most attention, only nine percent of identity theft actually occurs via the Internet. Most of it actually occurs when people go through your garbage, either when it's on the curb, or at the landfill. Other identity theft happens in hospital rooms. If a patient is unable to protect their own belongings, unscrupulous people with access to the room may help themselves to important information.


To protect yourself against identity theft, and the resulting damage to your credit, you have to be proactive. This means investing in a good shredder - one that cuts documents, discs, and cards into pieces around 1/4" across, and then crosscuts the strips. These pieces are almost impossible to get useful identity information from, even for the most persistent crook. When entering the hospital, or any facility where your documents may be unattended, take care to secure them. If you're unable to do so, get a friend or relative to take care of it. You should also use professional credit monitoring once a month, to let you know if something unusual is happening to your credit account. If you do see something odd, be sure to call the credit bureaus immediately!

By: Patricia Adkins

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ABOUT THE AUTHOR: Patricia Adkins is a specialist on the subject of mortgages and real estate. Her web site, www.FreeConsumerService.com, provides a wealth of informative articles and resources on everything you'll ever need to know about getting the best deal when you buy a home or refinance your existing mortgage.