Plan of Action for your Credit Report

- Anita J.

The very first thing you need to get is your credit report, which you can receive by contacting the three major credit bureaus and requesting a copy of your credit report. After you have your credit report, you will know your credit score. This will let you know where you stand and if there are any problems with your credit report. If you have a bad or poor score, you should look over the report to see where the problem might be.

The items you need to look for include too much debt, too many unpaid bills, anything such as a bankruptcy, or a default on a loan, failed to pay your taxes, or have had debts turned over to a collection agency. The problem could be something as simple as not having credit long enough to show good credit. No credit is as bad and poor credit in many cases.

When you start your plan of action for your credit report, you should learn where most of your credit is coming from. Start with your credit history. Your credit history is approximately one third of your credit score in many cases. This can be a real hindrance if you were late on payments, had unpaid taxes, bankruptcies, defaults on loans, or any type of debt that was not paid including medical bills. Of course, you cannot do anything about the past, but you can begin today to turn that around.

Your current debts will also count for approximately one third of your credit score. The lending company that you are asking for a loan will look long and hard at how much money you have to pay out currently. If you are stretched above your means, they will see this and know that you are headed for trouble. If you, in fact, owe out quite a large sum of money currently this can cause your credit score to be lower.

Around fifteen percent of your credit score is based on how long you have had bad credit. If you have a short credit history, this can in fact lower your score since you have no credit to show.

Approximately one tenth of your credit score is based on the types of credit you have. Paying bills that report to the credit bureaus are of course good if you always pay on time, however, a couple of loans even if they are small will also improve your score. A credit card looks impressive on your credit report as long as you are paying the minimum balance and are not over-extended.

Now, as you are creating your plan of action remember to keep these areas in mind and pay off bad debt as you go and do not over-extend in any area.