Understanding Your Credit Report

The total American consumer debt is more than two-trillion dollars. That matches the lowest savings rate in nearly 90 years. If you're one of the many with debt, understanding your credit rating should be a priority. But for some, it's hard to understand. Charge off's, review inquiries, ratings and scores. If these terms leave your head spinning, then now's the time to learn how to read your credit report. The first step is to pull your report.

There are three credit reporting agencies: Transunion, Experian and Equifax. You'll need to pull your report from all three agencies because they'll all show different things. Check the spelling of your name, personal information, social security number. Then, verify every entry to make sure it's correct.
One credit expert says it's not the credit cards that are bad, it's how you manage them.
John Cote, a financial planner in Myrtle Beach said, “I think the marketing of credit cards over the decades has been masterful, what the credit card companies and banks have done. The problem is in many cases where consumers are not trained properly are the big losers."
Cote said the lack of financial education is the problem. Young adults aren't learning how to manage their finances. So teaching them the basics is very important.

Here are a few things Cote said will negatively affect your credit.
-Too many revolving cards such as credit cards and department store cards.
-Late payments. Every late payment knocks points off your score
-Debt to income ratio. You should aim for your debt to equal 36% or less of your income.
-Keep balances less than half of the card limit.

High credit scores will get you lower interest rates and better loans. And by following a few simple steps, in as little as 6 months you can raise your credit score.

HELPFUL LINKS:

http://www.usnews.com/usnews/biztech/tools/modebtratio.htm -DEBT TO INCOME RATIO

http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/ManageDebtDyn.aspx?cp-documentid=5212192 LIFE AFTER DEBT

http://moneycentral.msn.com/content/Banking/Yourcreditrating/P88401.asp HOW TO READ YOUR CREDIT REPORT

http://www.annualcreditreport.com GOVERNMENT CREDIT REPORT SITE

http://moneycentral.msn.com/content/Banking/Yourcreditrating/P88401.asp HOW TO READ YOUR CREDIT REPORT

http://moneycentral.msn.com/quickref/quickref.asp?Cat=10&SelCat=7&RefType=0&QAMode=1&QID=729&Topic=3&Sub=4 THE THREE CREDIT REPORTING AGENCIES-CONTACT INFORMATION