thomas09

Whether you are getting ready to purchase a home using a professional buyer's agent or doing a little shopping for a new car, you'll want to know what your credit score is. If you discover your credit is not so good, check out your report to make sure there are no errors in it.

The first step to fixing credit report errors is to identify what the problem is. Consumers have to obtain a copy of their credit report and review it for accuracy. Everyone is entitled to one free report per year from each of the three credit bureaus: Experian, Equifax and TransUnion. When you are in the process of fixing your credit report, make sure you look for:

* Late payments- there should be no late payments in the last seven years on the report. This is important because 35% of a credit score is based on timely payments.
* Collections- the report should not show any collections or charge-offs within the last seven years.
* Types of account- sometimes accounts are not categorized correctly. A home equity line of credit should be listed as a second mortgage, not just a line of credit.
* Payment records- all paid-in full installment loans and all collections that have been paid in full or settled for less than the amount due should show a zero balance. Some times collections are not updated after they've been paid or settled.
* Mysterious accounts- consumers should be able to recognize all accounts listed on the report. Incorrect accounts do sometimes appear, either by mistaken identity or by identity theft. Make sure you review and identify these.
* Original dates- length of credit history is 15% of a credit score, so consumers should be sure the original dates they opened their accounts are accurate. Original account dates could be reported wrong if a credit card company is acquired or merged, or if a credit card is reported lost or stolen.
* Available credit- credit limits on the credit report should match up with credit card statements. Debt accounts for 30% of your credit score.
* Reason codes- consumers should read what the credit bureau has to say about why their score is what it is. These so-called reason codes appear in the credit report to explain what factors played into the credit score and what actions can be taken to improve the score over time.

Think twice before closing that credit card account, which shrinks the available credit listed on your report and hurts the credit utilization ratio. The key to good credit is being proactive in reviewing credit reports regularly. If consumers find their credit score is a respectable 680 or higher, removing minor dings may not be worth the effort. Finding and eliminating errors is one way to get the high credit rating they deserve. A Real Estate Buyers Agent can also help you through this process by directing you to the right financial advisor to help you fix your credit if it needs it.