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Reader Question I was told that just getting a copy of my credit report can send up red flags? can this be true…just from inquiring about my credit report and score?

Ellen,

Salt Lake City UT

Inquiries may remain on the credit report for up to two years. Inquiries made about your creditworthiness. An inquiry is made when you request credit. Inquiries can be broken down into three categories: regular inquires, promotional inquiries and account review inquiries. You only need to worry about the first type.

Inquiries are supposed to remain on a consumer’s credit report for up to two years, although many lenders are primarily interested in the number of inquiries made in the last six months. Applying for too many credit cards or store accounts in a short period of time can make a consumer look desperate in the eyes of lenders, especially if many of those requests have been turned down

Reader Question What is the fastest and easiest way to clean up my credit report and rebuild my credit score? Will just paying my bills ontime….for once, help correct the problem I am in now?

Onan

Galveston, TX

Yes that is correct, if you pay all debts on time, your credit score will be raised. The next major factor in determining your credit score is the total amount of your outstanding debt. Checking your credit report does not affect your credit score: Checking your credit report on a regular basis to ensure it is accurate and error free is recommended by Fair Isaac the inventor of the FICO Score. Maintaining a error free credit report is part of credit management which will improve your credit rating over time. Common sense tells you to close the accounts so that you cannot use them again. However, from a credit score standpoint, this is not a logical thing to do.

Reader Question OK, so let me get this straight, I can have false information about me or my credit history on my credit report and that false information will negativly affect my ability to get loans or determine how much I am going to pay in interest?

Dan

Houston, TX

Credit scores are a big mystery to some people..if not most of the US population. There are things called tri-merges, credit ratings, adverse credit, no credit, credit bureaus, etc. Credit histories are built by having a revolving (non-mortgage) account like VISA or MasterCard. Maintaining low-to-moderate balances on your credit cards making your payments on time gives you a good score. Credit reports and scores do not account for this type of information.

Credit cards show that you are capable of making regular payments and know how to manage your accounts. However, it is important to remember only to open new credit accounts as you need them. Credit reports are incredibly inaccurate. This is especially true for family members that share a name, like fathers ands sons (Jr, III, etc) and people with common names like mine.

Reader Question What is the credit scores used for and what is the worst and best score you can have?

Sara,

Reno NV

That is a great question Sara, credit scores range from 300 to 850. They are derived by examining an applicant?s payment history, length of credit history, new credit, types of credit and debt.

Can they really not give us an account because our credit isn’t good enough? We’ve always been able to open bank accounts and have pretty good history with our accounts. Customers just starting out can get cards for no score. People with damaged credit can apply for a card with bad rating.

Reader Question

How long does it take to clean up my crappy credit score? If I start making payments…on time, is there anything else I can do to speed up the “rebuild” process?

John,

Los Angeles CA

Payment patterns – You will improve your credit score by consistently paying your bills on time. If you have not done so already you might consider signing up for online banking or online payment options available through your credit card issuer.

Late payments can negatively affect your score in just a few months, whereas paying bills on time may take 6 to 12 months to generate a significant improvement in your score.

The best course of action is to adopt healthy credit habits and to maintain them. Late payments, collections, and bankruptcies have the greatest negative effect on your credit score.

If you have not paid credit items on time in the past do not let that stop you from changing you ways. Late mortgage payments will especially drop your score. Late payments are only reported once they are 30 days or more past due so if you miss that payment by only a couple days it shouldn?t hurt your credit.