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Common Questions Regarding Consumer Credit Reports: -
What Is A Late Payment?
On regular credit lines requiring periodic payment, such as department store cards, auto loans, mortgages, and credit cards, a late payment is recorded when payment is received after the due-date grace period. If there is any history of late payment or non-payment, the entry will generally be considered negative.

What Is "Bad" Credit?
There are degrees of "bad" credit. Deliberate non-payment of all your accounts with an unknown change of address is the worst. You are then considered to have "skipped". Bankruptcy is next. Then comes varying degrees of a late-payment history. Contrary to what some say, one late-payment account among, say, ten good ones is not considered "bad" in itself. The assumption will be that the late-payment account entails more than meets the eye - disputes, misapplication, etc.

What Is A Collection?
When an account is referred to collections because of delinquency or because of a bad check, this appears on the credit report as a collection account. Collection accounts can appear as paid or unpaid accounts. Any type of collection account, whether paid or not, is considered very negative by all credit grantors.

What are Court Records?
Court records are included in credit reports when they are negative. This includes bankruptcies, judgments, liens, divorce, satisfied judgments, and satisfied liens.

Who Determines If I Will Get Credit?
A credit manager. This person, charged with granting or denying credit,  looks at your credit report and decides whether to extend credit to you. Like all managers, credit managers all have their own procedures, agendas and theories.Some will disqualify you on one bad account. Others will see this one bad account as an aberration, and will grant credit. Go figure! In most cases, creditworthiness is an abstract. For example, most bankrupts have had extensive credit prior to their declaration if bankruptcy.

If I Pay Off A Delinquent Account, Will It Help My Credit?
For the most part, yes! It is better to pay off a delinquent account than not. The fact that you owe no money on an account, even if it was once delinquent, will not be considered unfavorable by some lenders. However, remember that most negative information can remain on your credit report for seven years from the date of last activity on an account. So, even if you repay a delinquent debt, the fact remains that the debt was unpaid for some time. In that sense, the unpaid debt it can appear as a negative entry for seven years from the time you repay it. The reality is, however, that the particular entry will be removed within a year.

What If I Had Late Payments Several Years Ago, But Not Now?
For most of us, life is a series of up and down cycles. Lost jobs, divorces, illnesses, medical expenses, business failures, etc., sometimes make it difficult to make ends meet. The fact that circumstances hindered your ability to pay in the past does not make you a deadbeat. If you have had a good payment record for the most recent two, or more, years, you will probably be alright. In fact, some lending institutions consider only your recent payment record.

Is Some Credit Easier To Get Than Others?
Without question! There are, basically, two types of loans - secured and unsecured. Secured loans are collateralized by something of value. Real estate and automobiles are the most common collateralized purchases. Depending on the down-payment, the risk of complete loss of capital is minimal to non-existent. What will be affected by poor credit is the size of the down-payment required. Conversely, unsecured loans, like credit cards, are usually unsecured and the complete loss of capital is very possible. With this type of loan, credit grantors tend to look for pretty good credit. Therefore, in most cases, it is easier to buy a house than to get an American Express card!

If I Have Very Bad Credit, Will I Be Denied All Credit?
Probably not by everyone! If you are recently homeless and without income, most certainly you will be denied credit. However, if you are employed, someone will take a chance on you! There are cottage industries which make a living off people in trouble. Keep in mind that bankrupts can get credit cards! They get them because some credit manager believes 1) that very few declare bankruptcy twice and 2) the bankrupt doesn't owe any money! And, also, if you have had a good credit rating in the not-too-distant-past, your chances are good!

What Is Predictive Scoring?
The credit bureaus have developed models that predict future bankruptcy, delinquency and the like (DAS, Beacon, etc.). These scores are used by credit managers and banks to help them decide how creditworthy you are. If the score is in the lower quartile, you will probably be denied the credit you seek. You will never hear, however, that you were declined for that reason. These scores are educated guesses and, as such, constitute no rational or defensible reason, in the law's eyes,  to deny credit.

What Is An Inquiry?
Every time a potential credit grantor orders your credit report, that inquiry is noted with an entry in your credit file listing the entity that requested the report and the date thereof. This does not affect most credit applicants. Only when the number of inquiries becomes excessive do credit managers take a dim view of them.

Can I See My Credit Report?
Not unless you order it yourself. Believe it or not, credit grantors, landlords and others are not allowed to show you your own credit report! If a credit grantor takes some adverse action based on information in your credit report, they must tell you from which credit bureau they received the information.

Who Will Request My Credit Report?
Of course, those to whom you apply for credit will definitely order one or more of your credit reports. Since renting an apartment or house is a form of credit extension by the landlord, the landlord and/or the real estate agent will want to see what your credit looks like. Others who will want to see your credit report include prospective employers, insurance companies, prospective business partners, investment companies and, should you not pay your debt, collectors.

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