Your Credit Rating And You

Credit ratings at their most basic are personal debt histories. Not to be taken lightly, credit ratings follow us our entire lives, providing a glaringly straight picture of our financial behavior. Lenders and credit card companies look to credit ratings for the most accurate assessment of whether we are good credit risks or not. But just precisely what kind of information do credit ratings contain?

Credit ratings contain all the vital personal information you would expect them to have, such as full name, address and social security number. Any debt you owe as well as your payment history will be added to your credit report. Credit ratings contain every store credit card you carry, their maximum limit and how close you are to reaching that limit. A clean credit report will show no late payments, few applications for new credit or loans and low balances on existing credit cards. Good credit ratings win lower interest rates with banks and credit card companies.

It pays to keep a good financial profile. Negative comments, past foreclosures and bankruptcies obviously do not look good on credit ratings. Credit ratings carry negative information for a long time. Late payments, for instance, remain on your credit rating for seven years and bankruptcies for up to ten. Frequent loan and credit applications are also damaging. You can help yourself by checking your credit report annually. Credit ratings sometimes contain information that is out of date, such as your maiden name instead of your married name or an old address. Negative errors can occur, too. These need to be found well before you apply for credit or loans. Credit ratings can take weeks, even months, to correct.