Financial Literacy 2007 - Credit scores
ABCs of credit reports

What to look for: According to Sweet, your credit score relies heavily on anything in the credit history portion of your credit report. "Not just if they missed a payment, or not just how much they owe, but when they opened it, what type of account it is, whether it's individual or joint, whether it's revolving or installment, how long it's been there, if they missed a payment and how long ago -- anything about the whole account history." Since negative inaccuracies can lower your credit score, make sure to dispute any information that isn't correct and certainly report accounts you don't recognize.

Tip:  Use this form letter to fix credit report errors.

4. Inquiries

This section contains a list of companies that have viewed your credit report. Your credit report will separate inquiries that impact your credit score from those that do not -- also known as hard and soft inquiries, respectively. Hard inquiries occur when you apply for new credit and give permission for a company to pull your credit report. Consumers and subscribers can see these inquiries. Soft inquiries are displayed only to the consumer and can occur when you request your own report or when one of your existing creditors reviews your account.

Where the information comes from: "Inquiries would be a reflection of any subscriber to services who had a permissible purpose and who accessed a report," says Sweet.

What to look for: Hard inquiries you don't recognize. Since these can lower your credit score, make sure every creditor listed sounds familiar to you.


These are accounts that have been turned over to collection agencies.

Where the information comes from: Collection agencies.

What to look for: Accounts you don't recognize -- these can be due to fraud or error, but either way, collection accounts can hurt your credit score, so you'll want to dispute any inaccuracies. For instance, if it's a collection account that's been paid, disputing it won't get rid of the account but it won't show up as an open collection account, says Sweet.

If you're disputing an inaccuracy, take up your dispute with the credit reporting agencies reporting the error. If you'd like to change the status of a legitimate collection account, you should contact the debt collection agency directly and negotiate with them. Collection debts should fall off your credit report within seven years from the original delinquency date, or the date when the account first became late.

6. Public records

This section will list any bankruptcies, liens, garnishments and other judgments against you.

Where the information comes from: "Public record information comes from all the different courts at every level -- city court, county court, federal court, all the courts," says Sweet.

What to look for: Anything that should not be listed. Since any information listed here can tarnish your credit score, you'll want to dispute any inaccuracies to the credit reporting agencies displaying them in your credit report. If the status of the account is no longer accurate, you should dispute that as well.

Tip: Use this checklist for disputing errors.


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