Negative Items On Credit Reports by widya.aryaniz

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									                      Negative Items On Credit Reports

The information contained in your credit report is supplied by creditors whom you have
past and present accounts with. All activities that have an impact on your credit are
reflected in the credit report and form part of your credit history.

Credit history is used to evaluate the creditworthiness of a borrower. This
creditworthiness is often represented by a credit score. A low credit score is
representative of a borrower who does not have a good reputation when it comes to
paying his debts while a high credit score signifies a borrower who knows how to pay his
debt well. Some financial institutions would consider a credit score of 620 high and
anything under that is low. Whether a credit score is low or high is entirely dependent
upon the policy of such financial institution and the nature of the credit that the borrower
is trying to get.

When a borrower applies for a loan, financial institutions use the information in the credit
report in deciding whether or not to grant the loan. It is through the credit report that
banks learn about the credit accounts and loans a person has made over the years
including the ones that have been right off due to insolvency or inability to pay. Anything
that results to default, late payments, bankruptcy, foreclosures and charged off accounts
will appear in the report under negative items. These negative items can really put a
damper on prospective lenders when it comes to lending you money. Generally, no one
would like to lend someone who has been tagged as non-paying.

But does having negative items in your credit history mean the end of your credit
reputation? Definitely, you still have a chance to improve your reputation as a borrower.
By making prompt payments and settling past dues, your credit score can improve over
time. Negative items can stay recorded for 7 years with the exception of some negative
items such as bankruptcy which stays in your record for 10 years. However, if you exert
conscious efforts in improving your credit report, you will be able to see favorable results
in time.

Not all negative items are caused by delayed payments and inability of the borrower to
pay. There are times when errors occur. What with all the millions of data being
processed everyday, it is not impossible that mistakes will be made along. When you spot
something in your credit report that you think should not be there, you can write a letter
to the credit bureau to demand correction of such item. The three major credit bureaus are
Equifax, Experian, or TransUnion LLC. Although there are other credit bureaus that have
access to your credit information, you may choose to write to these three major credit
bureaus.

The creditor is expected to respond to your letter of complaint within 30 days from
receipt of notice. Failure to respond within 30 days shall result to the removal of the item
in question regardless if it was truly a mistake or indeed a negative item.

								
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