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Always Review Your Credit Report

It is wise for everyone to order a copy of their credit report each year. A credit report is an important document that everyone should keep current because mistakes often occur.  Mistakes can be corrected if they are discovered. There may also be items on your credit report that are not inaccurate information, but are items that need to be erased because they are appearing past the time when they should have dropped off. Most negative information stays on a person’s credit report for seven years or ten years if it is a bankruptcy.

You may also be interested in deleting inquiries that have been made on your credit report. Each time that you apply for any type of credit and your credit is checked, a credit inquiry shows up on your credit report. Creditors look at many credit inquiries negatively. If, in their view, you are attempting to get too much credit from too many sources, then you may be seen as a questionable credit risk. Whether or not the credit applied for was granted, this may still be seen as undesirable.

These credit inquiries can affect your credit score, and also if you are approved or denied credit. There are “soft” inquiries and “hard” inquiries. Soft are inquires when you or an existing creditor pulls your report to see how things are going and if any problems or potential problems may exist. Soft inquiries have no affect on your credit score. Hard inquiries, on the other hand, do count against your credit score as these are when your credit report is pulled because you have applied for some type of new credit.

Many people want to know what happened when they were “shopping around” for mortgages or auto loans and multiple inquiries were shown up on their credit reports effecting their credit scores.  Fair Isaac, the scoring system used by credit reporting agencies, has now provided an inquiry buffer. This means that all auto and mortgage inquiries are ignored that appear during a 30 day period.

To keep your credit report current and accurate, you should examine the report yourself and see if there are any errors.  Immediately dispute any information that is inaccurate. Also, be careful to limit the amount of credit that you apply for to reduce the credit inquiries.  If there are debts on your credit report that you were unable to pay and resulted in delinquencies, contact that creditor and make an attempt to settle that debt. Also, write a letter explaining why that debt was delinquent. That letter will be included in your file so creditors will be able to view it before they make a decision about granting you credit. Doing these things, as well as making all other payments on time, will protect your credit score and allow you to continue to obtain the credit that you need when you truly need it.

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