A credit report is a summary of your financial reliability – for the most part, your history of paying debts and other bills. It is prepared by credit bureaus primarily for use by lenders, employers and others who, under federal law, have a legitimate need for the information, such as when you apply for a loan, an insurance policy or an apartment.
A credit report contains a large amount of information about you and your credit. In general, a credit report contains four parts:
Lenders voluntarily supply the information to credit bureaus on an ongoing basis; no federal laws require companies to submit the data. Having access to current and reliable information about you helps lenders make informed decisions and offer you financial products and services more quickly.
If you apply for a loan, lenders need to view and analyze your credit report to determine your credit worthiness. They may look for certain negative or positive aspects of your credit report to determine whether or not you might be a good candidate for a loan. Here are some points of interest a lender might evaluate:
The Fair and Accurate Credit Transactions Act (FACT Act) enables you to obtain a free copy of your credit report once a year from each of the three major credit bureaus (Equifax, Experian and Trans Union). The three nationwide consumer reporting companies have set up one central website, toll-free number and mailing address through which you can order your free annual report. To order, go to annualcreditreport.com or call 877-322-8228. It is recommended that you review your credit report annually. It is especially important to review your report before making a major purchase so that you can correct any errors before it slows down your credit approval or prevents you from getting the best possible loan terms.
Community Bank is pleased to partner with Equifax, a world-wide leader in the management and protection of personal and commercial credit information. Equifax Credit Watch™ is a unique program that helps protect you from identity theft and fraud by alerting you to major changes in your Equifax Credit Report™ before serious damage is done. Visit Equifax at www.equifax.com.
If you believe your financial information has fallen into the wrong hands, you can place a “Fraud Alert” on your credit file. A Fraud Alert helps prevent anyone from opening a new account in your name. They act as a red flag on your credit report, visible only when businesses access your file to possibly extend you credit.
To place an alert on your account, call one of the three credit reporting agencies and ask them to flag your credit file for fraud. Within 24 hours, an alert will be attached to your credit file and your name will be removed from pre-approved credit and insurance applications for two years. Experian, Equifax and Trans Union share data, so after calling one company, the other two will be notified. It is best to confirm that all companies reflect your fraud alert after placing it. If you need to apply for a loan during the period that your credit file is on alert, notify your lender. To remove a fraud alert, you will need to send requests in writing to one of the three credit-reporting agencies.
A credit score is a three digit number calculated by a credit bureau, a lender or another company for use in making a decision on a loan application or other product or service. Credit scores range from 300-850. Many lenders use a system developed by Fair Isaac and Company call the “FICO Score”. Think of credit scoring as a point system based on your credit history, designed to help predict how likely you are to repay a loan or make payments on time.
In general, the better your credit score the better your chances are of getting a loan with an attractive interest rate. A lower credit score yields a higher rate because the lender needs to compensate for the risk he or she is taking on with the customer. So, when it comes to getting a good loan, it’s important that your credit report – the basis for your credit score – is accurate, complete, and in the best shape possible.
There are multiple factors that can influence your credit score. These factors can have a positive or negative effect on your credit score. Listed below are just a few of the factors that you need to be aware of when considering your credit. The chart following shows how the factors can weigh on your credit score.
There are a number of ways you can improve your credit score. If you follow the guidelines listed below, your credit could possibly be improved!
Your scores, along with an explanation of how the scores was derived, typically are available online for a fee.
Community Bank is taking substantive measures to protect the safety and security of your accounts. If you have any questions or concerns regarding the protection of your financial identity, please visit your nearest Community Bank branch location and speak to one of our bankers.
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