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Your credit report contains your credit history. It includes all of your loan and credit card account information. Some of the items reported include
account balances, date the account was opened, monthly payments and credit limits. Negative credit information is also reported including bankruptcies,
tax liens and collection accounts.
Maintaining a good credit history enables you to take advantage of the best rates available, whereas a poor credit history subjects you to higher
rates or may even prevent you from obtaining a mortgage.
Credit scores have nothing to do with a borrower’s age, race, gender, religion, national origin, or marital status. Your credit score is determined by
analyzing your record of paying debts. Here are some of the factors considered:
• Public records pertaining to credit. A search of public records in the county recorder’s office shows whether the customer ever declared
bankruptcy. It also indicates whether legal claims have ever been filed against property owned to secure payment of money owed for delinquent
loans, lawsuits, or judgments.
• Outstanding balances against available credit limits. What is the balance due on mortgages and consumer installment debt such as car loans,
charge accounts, and credit cards? Outstanding balances that exceed the percent of the available limits puts the borrower in the category of a
higher-risk borrower.
• The age of open delinquent accounts. Another indicator of higher risk is whether a borrower has been or is currently 30 or more days
delinquent on their credit card charge account debt or other loan payments.
• Recent inquiries generated by a borrower seeking credit. Having four or more applicant generated credit inquiries in the past year indicates
that the borrower may need a slew of new loans or credit cards because they’ve maxed out their current ones. From a lender’s perspective, that’s
an alarming development.
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