news-3A very important part of your credit education is staying on top of credit facts in the news. This week we will take a look at things that are happening right now that affect your total financial future.

According to the Community News, There are 5 things you need to know about your credit report

1. There could be errors in your credit report

The Federal Trade Commission reports that 90 percent of credit reports contain some kind of mistake. Errors can range from a misspelled name to a false bankruptcy and are typically the result of data entry mistakes on the part of credit bureaus. Information gathered by the three credit bureaus – TransUnion, Experian and Equifax – is not screened or verified by any government agency.

2. Every credit score is calculated from five main components

35 percent is payment history: have your payments been on time?

30 percent is debt ratio: are you using too much of your available rolling credit, like credit cards?

15 percent is length of credit history: how long have you had credit?

10 percent types of credit: what is your ratio of secured versus rolling credit?

10 percent is number of credit inquiries: how many times has your credit report been checked recently?

3. Anything below 720 is not a great credit score

Credit scores range from 350 to 850. The best ways to improve your credit score are: monitor your score, understand what affects it, pay bills on time, do not use more than 30 percent of your available revolving credit and make sure incorrect information is fixed.

4. Negatives can have a long-lasting effect

A 30- to 180-day delinquent account remains on a credit score for seven years, as do collection accounts, closed accounts and charged-off accounts. A lost credit card remains on a report for two years. Chapter 7, 11 and 12 bankruptcies remain for 10 years and Chapter 13 bankruptcy remains for seven years. Unpaid tax liens remain for 15 years. Credit inquiries remain for two years.

5. Good ideas can be bad for your credit score

Never trust collection agencies, Henderson said. For example, a four-year-old bad debt will disappear from a person’s credit report in three years. If that person decides to pay the bad debt because of collection agency calls, it changes the date of last action and that bad debt will remain on the report for seven years from the date it was paid.

The three credit bureaus are not government agencies; they are for-profit companies and consumers have a legal right to challenge errors on their credit reports.

The bottom line: monitoring your credit report is the best way to keep it healthy

At HOPE we educate our clients everyday on making wise credit decisions. If you would like to know more please call us at 704-503-3669. Our staff is waiting on your call.