How to Read Aging History on Credit Reports

Each person is entitled to an annual free report on his credit from each of the three main credit-reporting agencies: Experian, TransUnion and Equifax. Information about identifying information, credit history, public records and credit inquiries is included in the report of each agency. Although each of the three covers the same basic areas, their report formats differ. The information contained in the reports also varies based upon whether the creditor reports information to a particular agency. An important area to review is the aging history for each account found in the credit history section.

Instructions

Experian

1

Turn to the section of the credit report labeled "Credit Items" or "Accounts in Good Standing." Accounts that fall under either of these sections might contain information about payment history.

2

Identify the "Account History" field in the middle section of each account.

3

Read the statement in the "Account History." The statement lists every payment that was not made on time, and the number of days it was past due (using 30-day increments), as of the date the creditor provided information to the credit reporting agency. The length of the history period will vary by creditor, but it's generally the same length of time the account has been open.

TransUnion

4

Turn to the section of the credit report labeled "Adverse Accounts" or "Satisfactory Accounts." Accounts that fall under either of these sections can contain information about payment history.

5

Identify the series of boxes with a month indicated underneath at the bottom of the account.

6

Read the symbol in the box corresponding to a month. Each box will have a code in it. "OK" means the loan was current that month. If the payment was 30 days late that month, the box will contain "30." The same format is used to denote payments that were 60, 90 and 120 days late. The box will have an X if the payment status is unknown, and N/A if the status is not applicable. The number of boxes shown will vary by creditor, but it generally corresponds to the length of time the account has been open. A key is included in the "Account Information" tab.

Equifax

7

Turn to the section of the credit report with "Account Information." Accounts are placed under various subheadings depending upon type (mortgage account, revolving accounting, installment account.)

8

Identify the "Payment History" table at the bottom of the account. The table lists every month in a year for the last seven years.

9

Read the symbol in the box corresponding to a month. Each box has a code in it. A dot means the loan was current that month. If the payment was 30 days late in a given month, the box will contain "30." The same format is used to denote payments that were 60, 90, 120, 150 and 180 days late. Other codes include CA for collection account, "F for foreclosure and CO for charge-off. The payment history key is included in the credit report.

Read More

Does an Apartment Guarantor Affect Credit?

Qualifying for an apartment on your own can be difficult, especially if you have a limited credit history or have recently started a new job. A guarantor, or cosigner, can help you qualify for the apartment of your dreams. While having a guarantor does not impact your credit, it you fail to uphold your lease agreement, both you and your cosigner's credit may suffer.

Guarantor

Guarantors are usually parents or other relatives but may be any person who is financially able and willing to vouch for your qualifications as a tenant. By cosigning on your lease, a guarantor is legally agreeing to pay your debts if you, the primary account holder, fail to do so. If you do not meet a leasing agent's qualifications, your guarantor must. Excellent credit and proof of financial stability are basic requires for a potential cosigner.

FICO

Due to an increase in the prevalence of credit fraud, the Fair Isaac Corp., which assigns credit scores based on a consumer's determined creditworthiness, has changed its policy regarding guarantors. In the past, people with a credit guarantor would be able to piggyback, or receive authorization to the credit card account of their guarantor, as well as an immediate improvement in their credit score. In an attempt to reduce this type of fraud, Fair Isaac no longer looks at cosigner's credit scores when determining a consumer's credit rating.

Urban Rentals

In large urban areas, where the competition for housing can be stiff, leasing agents often require guarantors to meet strict requirements. In New York City, guarantors for otherwise unqualified applicants may be required to make 80 to 100 times the monthly rent in annual salary and provide bank statements, investment records, and other financial proof of their reliability. Failing to uphold your rental agreement could result in your cosigner being held financially liable for thousands of dollars, which could negatively impact his credit score.

Considerations

Family members may be willing to cosign on your lease, but you may want to consider carefully before allowing them to do so. If you lose your job or become sick or injured, you may no longer be able to pay your rent, making your cosigner liable for payment. Likewise, since both your names would be on the lease, your credit as well as his could be impacted if the debt goes to collection or legal action is taken against you. Seeking a guarantor through a private agency may be a better alternative.

Read More

How to Increase My Credit Score With a Merchant Line of Credit

A merchant line of credit is an additional credit line used for business or corporate financial purposes. Because a merchant line of credit acts like a regular line of credit, a merchant line of credit and business credit card have the potential to affect both your personal credit score and your business's credit score (i.e., PayDex, the numerical credit score assigned to businesses by credit bureaus).

Instructions

1

Understand how a merchant line of credit interacts with your personal credit score. A merchant line of credit will not directly affect your personal credit score, though it will affect your business's credit score (PayDex). However, adding a merchant line of credit to your financial portfolio can strengthen (but not raise) your personal credit score by adding an additional level of measurement that financial institutions will see when reviewing your personal credit history.

2

Apply for a merchant line of credit by opening a business credit card with the financial institution of your choice. When you apply for a merchant line of credit, the financial institution will run a credit check on your personal credit score because your business will have no credit history under its own name. Thus, only apply to banks or financial institutions that will accept your application based on your personal credit score.

3

Consider opening a Data Universal Numbering System (DUNS) account. Your DUNS account number is a nine-digit identification code used to track businesses and is recognized by most major world governments. Many retailers, such as Viking or ULine, require a DUNS account number before your business can open a merchant line of credit with them.

4

Manage your merchant line of credit appropriately. Pay your business bills on time, especially to retailers that utilize your DUNS number and thereby report your financial standings directly to the D&B (the organization that manages business credit scores and the PayDex).

5

Maintain activity on all merchant lines of credit and business credit cards. Failing to utilize your merchant line of credit regularly will cause your business's credit score to fall.

Read More

Does Cashing a Bad Check Affect Your Credit Score?

It may not be as embarrassing as actually writing a bad check, but cashing a bad check may cause headaches, especially when the original check writer fails to make good on the draft. In most states, the person who cashes the check is responsible for it, and depending on the severity of the situation, the person who cashed a bad check could end up with a debt judgment that appears on his credit record.

Responsible Parties

Although the laws of each state differ, most states, with minor variation, adhere to the model uniform commercial code. The UCC, in general, assigns responsibility for a negotiable instrument to each person who is a "holder in due course" -- that is, a person who is entitled to the proceeds of the instrument. When a person writes a check to another person, and the recipient intends to cash it, the organization that negotiates the check can only take action on the person who cashed it. It's up to the person who cashed it to take action against the check's maker.

Restricted Endorsements

The UCC grants exceptions for "restricted endorsements" -- that is, a condition that is applied above the signature of the person endorsing (or signing) the back of the check. For example, if a person wrote "without recourse" above his signature, the person who cashed the check is legally barred from taking action against the person who signed it. Most banks and commercial check-cashing establishments will not cash a check with a restricted endorsement.

Normal Recourse Scenario

If Bob wrote Sally a personal check for $200, and Sally had it cashed at the service counter of her local supermarket, then the supermarket will contact Sally if Bob's check bounces. The market will not contact Bob. Sally will have to reimburse the supermarket for its loss -- including any applicable fees -- and then Sally will need to be reimbursed by Bob for her loss. She could also refer the matter to the local prosecutor.

Potential Consequences

If a person is unable to make good on the bad check that she cashed, the bank or company that negotiated the check can either sue her or send her to collections. In this case, a derogatory record will appear on her credit report -- either the collection account or a civil judgment. At this point, the person who cashed the bad check has a credit hit. However, it takes months before a bad-check dispute would get to this level, so if the person who cashed the check is diligent about making good on the bad check, she usually can avoid a negative credit record.

Check Acceptance

People with unresolved bad checks, whether they cashed them or wrote them, could be listed in check acceptance databases like Chexsystems and find that they cannot write or cash checks with certain retailers until the negative record is cleared up. This is technically not a credit record, but placement on a national bad-check registry can affect a person's ability to pay with a check for future transactions.

Read More

How to Dispute Late Charges Reported to Credit Bureaus

The Fair Credit Reporting Act (FCRA) allows you to dispute incorrect entries on your credit report. Military Money says the credit bureaus make mistakes frequently, as do the companies that report your financial information. This could include incorrectly reported late charges, which will bring your credit score down. You can dispute these charges and force the credit bureaus to remove them if they are truly in error.

Instructions

1

Determine which credit bureaus are listing the last payments. Equifax, Experian and TransUnion each compile their own credit reports, and the information can differ. The three bureaus must each give you a free credit report on request every 12 months. The Federal Trade Commission says to order the reports through the annualcreditreport.com website or call (877) 322-8228.

2

Determine whether the information is incorrect and what is wrong with it. You can only dispute late charges if they are being reported in error or if there is some other inaccuracy on the item. Otherwise the credit bureaus will label it a frivolous dispute and refuse to investigate it.

3

File a dispute with any of the credit bureaus that are reported the late charges incorrectly. Use their online forms and specify your reasons for believing the information is wrong. Valld reasons include payment dates, amounts, account number, balance on the account, credit line, high balance and virtually anything else that is being reported as part of the item.

4

File a dispute with the company reporting the late charges if the credit bureaus rule against you. The bureaus have 30 days to investigate your complaint. They must remove the late charge information if they cannot confirm it. They can leave it on your reports if they believe its validity has been proven. You can contact the original creditor yourself, according to Military Money. Ask them to stop reporting the late charges if they cannot provide supporting documentation or other proof of validity.

Read More

Does Getting a New Credit Card Raise Your Credit?

Building credit is essential if you are interested in obtaining financing and attractive interest rates in the future. To build up a credit profile, many people open credit card accounts. While opening a card account may not directly affect your score by a certain number of points, it can help increase your score indirectly.

Credit Utilization Ratio

One way that opening a credit card account could potentially affect your credit score is by altering your credit utilization ratio. This ratio is a measure that looks at how much open credit you have in relation to the amount of debt. When you have balances below 30 percent of the credit amount you have available, this reflects positively on you. By opening a new account, you could get a more favorable ratio, which would increase your score.

Regular Card Use

Simply opening a credit card account may not help you build your credit score that much. At the same time, opening a credit card account can help you because it gives you the ability to make regular purchases with it. If you make small purchases with your credit card and then pay off the balance each month, you can help build your score. The most important factor when calculating your credit score is your payment history. If you make your payments on time every month, this can significantly boost your score.

Dangers

Even though opening a new credit card could potentially help your credit score in some situations, it can also work as a detriment to your score. According to the credit-reporting bureau Experian, having too many cards with large balances or having too much credit available can hurt your credit score. This means that at a certain point, opening another credit card could be bad for your score. If you rack up large balances on your card, it will definitely hurt your score.

Credit Mix

Instead of opening only credit card accounts, you can get some additional types of credit to help boost your credit score. According to the financial information website Bankrate, having several different types of credit in your credit mix is beneficial to your score. For example, if you have an installment loan, such as a car loan or student loans, in addition to your credit card accounts, this can work in your favor. Focusing too much on credit card accounts could work against you.

Read More

How Lines of Credit Affect Your Credit Score

Maintaining a high credit score requires finding the right balance between credit and debt. Having lines of credit, such as credit cards, is a way to establish credit. Various factors determine a credit score. Raising a credit score involves more than just making timely payments. Depending on how it is managed, the line of credit has a positive or negative affect on a credit score.

Payment History

Most creditors report customer information to credit bureaus on a monthly basis. Payment history impacts a credit score the most, accounting for 35 percent of a total credit score. Bills paid on time will have a positive affect on a credit score. If payments are consistently late, the credit score will drop.

Credit Utilization

Credit utilization accounts for 30 percent of a credit score. Credit utilization is the balance compared to the total amount of available credit. A line of credit that has reached the limit can drag down a credit score. Ideally, lines of credit should carry low balances and high credit limits. People should pay balances in full each month to increase their credit score.

Length of Credit History

An established account typically has a more positive effect on a credit score than a newer account. The length of time an account is open is 15 percent of a credit score. A person can raise her credit score by keeping her oldest accounts in good standing. Maintaining a lengthy history with a credit account shows lenders the customer's ability to meet her financial commitments.

Type of Credit

Consumers often do not realize the importance of having a mix of credit lines. This type of credit is 10 percent of a credit score. People should aim for a combination of credit that includes credit cards, installment loans and secured debt.

Credit Inquiries

Applying for too many credit cards can lower a score. Credit inquiries account for 10 percent of a credit score. Applications for credit initiated by the consumer are considered "hard pull" inquiries. When a person obtain's her own credit report, it is classified as a "soft pull" inquiry, which does not lower the credit score. Consumers are encouraged to monitor their credit report annually.

Read More