If you are wondering what potential lenders or employers see when running a credit check on you, you have come to the right place. With that, here are some very important things to be aware of that your credit report will display.
Any credit or loan accounts you have ever opened will show on your credit report. Lenders will be able to see the status of each account and understand your past and present actions with borrowed money. On that note, here are some things that will show when it comes to your accounts:
1) Accounts you have paid off and closed
2) Accounts you have open
3) Accounts that were charged off
4) Accounts that went to collections
Accounts that you have paid off will look good on your report; especially if they are installment loans. However, if it was a credit card that you paid off and closed, the lender may want to know why.
The accounts opened on your credit report will show the potential lender or employer how much credit you are using. Make sure that your credit usage is lower than 36% of your income.
Accounts that you have charged off will show on your credit report. They can remain on there for seven years. However, these can be removed if you pay them before they are sent to collections.
Accounts that have gone to collections will not only show on your credit report, but remain on there for seven years. These accounts, unlike charge offs, cannot be removed from your credit report until seven years have passed.
Places you have lived
The places you have called home while receiving credit will show up on your credit report. Therefore, if you have a lot of addresses in a small period of time, the lender or potential employer may question your stability.
The various times that you have applied for credit will show up on your credit report. A good tip is to try not to make more than one query a year for a new credit card. Not only will multiple credit card inquiries make you look desperate for credit, it will make you look risky.
However, you can make around three inquiries for an automobile or house in one year and be safe. These inquiries are not as harsh and credit bureaus are more understanding toward their purpose.
Public records such as bankruptcies, tax liens, and foreclosures will show up on your credit report. These all will remain on your report for seven years for the most part.
The two exceptions will be unpaid tax liens and Chapter 13 bankruptcies. Unpaid tax liens can remain on your credit report for 15 years while Chapter thirteen bankruptcies can remain on the report for 10 years.