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Credit Report 101: Clean Up a Poor Report
Do you pay your bills late and submit the minimum payment or less on credit card balances?
Have you made it a habit to max out credit cards?
Are you relying on payday loans just to survive?
You aren’t alone. But don’t be intimidated or overwhelmed if you need to improve a bad credit report. Instead, think back to your college days (and the time when your unhealthy credit practices may have started).
Approach cleaning up a poor report just as you did your educational career:
Hard work → high grade point average → dream job
Follow that formula to clean up poor credit:
Hard work → high credit score → dream home and car
GPA Credit Score
3.8 760
Just as a college GPA is a cumulative measurement of how well you perform in all of your classes, your credit score is a cumulative measurement that can fluctuate and is based on multiple factors:
• Fewer overdue payments = higher credit score
• More loans paid off = higher credit score
• Longer credit history = higher credit score
• Zero account activity = lower credit score
• Too many credit inquiries = lower credit score
• Credit card accounts only = lower credit score
• Combination of accounts (mortgage, auto loan) = higher credit score
Next, think of a credit report like a report card. Just as you checked your report card each semester, examine your credit report to determine the health of your credit score. Check out our sample credit report “report card” to get a sense of what might be included:
• Identifying Information—Your name, current address, previous addresses, Social Security number and birth date are all listed correctly. And no aliases: Good work!
• Employment—Your past employment information is there, but not your current information: Needs some improvement.
• Credit Information—All the accounts you have with banks, retailers and credit card companies are listed. But you’re overdue on one credit card and have maxed out another: Clean up your act, or register for summer school!
• Public Records—Your public records are clean. There are no state or county court records for bankruptcy, tax liens or monetary judgments. Keep up the good work.
• Credit Inquiries—You’ve applied for 15 different credit cards over the past 6 months. Slow down on those credit inquiries!
You didn’t wait until after graduation to improve your GPA—why would you hesitate to clean up a poor report? Start today by requesting a free credit report and taking advantage of a credit monitoring service.
