Most American's know that they are able to get a free copy of their credit.

The big question: what to do with the credit report once you receive it???

I came across this article that talks about 6 items to review on your credit report.

 "You've pulled one of your credit reports. Now what?

How about giving it the six-minute treatment? While you definitely want to read the full report in detail, a quick check on a handful of indicators can give you an instant appraisal of how good –or bad — your credit is right now."

Source Yahoo Finance – 6 Items to Review on Your Credit Report

Late payments are items to review on your credit report.

On time payments make up 35% of your credit score.

Late payments of 30,60,90, or 120 days late damage your credit score.

Once you have been late the more time that passes from since the late payment the more your credit score will rebound.

If you are late on a payment the sooner you pay the bill the sooner your credit score will recover.

Remember to contact your creditor if you are going to be late.

High Debt-to-credit Limit Ratios are items to review on your credit report.

You also want to look at your debt to credit ratio with your revolving credit accounts.

This also includes adding the sum total of all the account limits verse the amount owed on your revolving credit accounts.

The amounts owed account for 30% of your credit score calculation.

Your credit balances need to be below 40%.

Collection acitivity are items to review on your credit report.

Many people ignore or forget accounts that have gone to collection.

You must also make sure that the collection accounts belong to you.

Check with your state's attorney general on the time limit a creditor has to sue you over a collection.

I advise my clients to leave collection alone that are 3 years or older.

When you payoff a collection you restart the date of the last activity.

Judgements, Liens, Bankruptcies are items to review on your credit report.

These items will appear in the public records section of your credit report.

Judgements or liens that have been paid off need to be recorded with your local county clerk.

The release of lien will be forwarded to the credit bureaus.

If this process is not done the lien or judgement will stay on your credit report indefinitely.

Active Accounts You Closed — Or Never opened are items to review your credit report.

I would advise my clients not to close active accounts.

You lower your debt to credit ratio.

This will hurt your credit score.

Even if you are not using the account you need to leave accounts open to help other sections (pay history, length of credit history) of your credit score.

Hard Inquires are items to review on your credit report.

Hard inquires come from all credit that you have applied.

Hard inquires will show up on your credit report for 2 years.

During the first year these inquires hurt your credit score.

When you are shopping for a loan (auto, mortgage) do it with in two weeks. 

After this time period they will add on as separate inquires to your credit.

These 6 items to review on your credit report are just the beginning.

You will need to go back and throughly go through your credit report.

Your financial coach,

Renee Lawson

Recommended Resources:

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