Your Credit Report
Unfortunately, many people don’t pay attention to their credit history until they absolutely need it. Your credit report is usually the first thing creditors look at when they’re considering selling you a car, loaning you cash, or setting up a mortgage. In short, it’s a report card from the Credit Bureau on how you handle your money. So what’s in it?

First, all of the expected ID information: Your name, birthday, social security number, last few places of residence, and all of the jobs you’ve had (including dates of employment). Your credit report also contains all matters of public record, including medical bills, unpaid debts, court judgments, bankruptcies, and tax liens. It also displays a list of companies or individuals who have obtained your credit report recently. Only companies with business reasons, current or potential employers, and government agencies are allowed to access your report and only with your permission.

Then there’s a list of your creditors (your credit cards and crediting financial institutions like WFS, Inc.). Each credit account is listed with your account number, date of opening, highest credit loaned, payment terms, payments you’ve made, your current balance, your current limit, and a list of every time you’ve been 30, 60, and/or 90 days late with a payment.

Your Credit Rating is a code composed of a letter and a number, and you have one credit rating for each account. The letter pertains to the source (i.e. "R" indicates a revolving line of credit, like a credit card). The number can be 1-9, with each number representing something different.  Here are a few examples:

1: Good credit, nothing significantly negative to report
2: The account has been or is currently 30 days delinquent (30 days have passed without at least a minimum payment)
3: The account has been or is currently 60 days delinquent
4: The account has been or is currently 90 days delinquent
5: The account has been or is currently more than 90 days delinquent
8: The creditor has repossessed your collateral (usually a car). A note is made indicating whether the repossession was voluntary or involuntary on your part.
9: The creditor has “charged-off” your account. This often means the creditor has turned the account over to a collections agency for collection. Furthermore, a 9 rating also reports the current balance of the account. Once it’s been paid, the balance will show $0, which is can be critical if you’re trying to secure a new loan.

To check out your credit report, you can go to www.AnnualCreditReport.com. It is very difficult to change your credit report, but sometimes there are mistakes that you need to correct. It’s worth the trouble to get them fixed. Contact the creditor or credit bureau to start the dispute process to clear up any information you feel is incorrect.

There are three main agencies that issue credit reports. WFS uses Equifax. Listed below is the contact information for all three agencies.

Equifax Information Services

P.O. Box 740241 Atlanta, GA 30374 1-800-685-1111 www.equifax.com

Experian National Consumer Assistance Center

P.O. Box 2002 Allen, TX 75013 1-888-397-3742 www.experian.com

Trans Union Consumer Disclosure Center

P.O. Box 1000 Chester, PA 19022 1-800-888-4213 www.tuc.com

 

Building and Improving Your Credit
What if you don’t have any credit? A credit card is a relatively easy way to establish credit.  Even a $300-500 spending limit is fine. Most credit cards nowadays carry a higher APR; paying it off every month will minimize your finance charges. It’s hard to get a low APR without any prior credit, but as time goes on credit card companies often lower your APR or raise your credit limit. Try to pay off the credit card every month, and in a year or so you’ll have a credit history that will allow you to apply at most financial institutions. If you’ve had credit cards in the past, but don’t currently have any accounts, get a new card and use it for 6 months to reestablish your credit history.

What if you've got bad credit? First, if you've had a Charge-Off (a credit rating of 9), making sure the balance is $0 will help to put that negative item behind you. Contact the creditor as soon as possible and you may be surprised at payment or even settlment options that are offered. If you've had collateral repossessed, make sure you contact the creditor to confirm your account is settled. If the repossession happened very recently, you may be able to renegotiate your payoff plan to prevent the repossession being permanently recorded. Finally, keep track of your creditors and credit balances. You'd be astonished to find that the smallest things (like video rental late charges) can show up on your account. You may not think it's a big deal, but any delinquency on ANY account, even if the balance is small, can affect your ability to get credit when you need it.