In applying for a credit card, a line of credit, or financing, the way you have borrowed and paid for previous deals are very important. This is how a potential new lender will assess how much of a risk you are to him or to the company he represents.
Your approval for any of the financial assistance mentioned above highly depends upon the three major credit reporting agencies. This statement is the decisive element in your application since it determines your credit score. Your credit score, or the average of the three scores these agencies give you, will be used by the financing company to gauge your creditworthiness.
If you are thinking of applying for a major loan, it would be best if you check the status of your credit; whether you need to fix it or not. It would be such as a shame f you already had a plan in mind and it gets disrupted by a denial due to bad credit.
Bad credit may or may not be reparable, depending on what is causing it. If it is just due to erroneous entries on your credit report, then that could be fixed. What you need to do is write a letter of complaint to the credit bureau that issued the report and explain to them what you found. They are obliged to check into your complaints and when they verify your claims, the errors will be deleted from your report. A copy of the report will also be sent to lenders and creditors who have requested for copies in the last six months.
If what are causing your bad credit are singular events that may have good reasons, such as late payments due to illness or natural disasters, you can also request deletion of said items from your report. Other causes of bad credit that are reparable may be late payments, or outstanding balances. For outstanding balances, you can try and update payments before your next loan application.
But, you will not be able to check on your credit status unless you have your credit report in your hands.
Thankfully, a Federal Law passed in 2004 warrants that everyone should get one free report annually. This report will come from one of the three major credit bureaus – Equifax, Experian, and TransUnion. This free credit report is requested via a centralized source called the Annual Credit Report Request Service which has a website that you can browse for details on how to get your report.
You can also receive copies of your credit report if you are in one of the following situations:
1. If you are out of a job and would like to apply for new employment within the next two months
2. If you are a recipient of public welfare
3. If you believe your credit report may contain errors due to fraud
4. If you applied for a loan and were denied
5. If you are from any of the states that are offering free annual credit reports from the two or three major credit bureaus
Tags: credit card applications