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Checking Your Credit Score: 7 Common Consumer Questions

Despite the wealth of information online about credit reports and credit scores, or maybe in part because of it, there's still a lot of confusion among consumers about credit reports and their credit score. A credit score is extremely important to anyone looking for credit, a car or home loan, or even a new apartment or job. With so many different articles and web pages out there on the web, it can be hard to figure out what information is correct or incorrect, and what your credit score really means.

Following are some of the most common questions consumers have about credit scores, and the straight talk answer to each.

Q: If I declare bankruptcy or get too far behind, isn't my credit ruined forever?
A: No. While six to ten years can seem like forever with bad credit, no black marks are permanent. Bankruptcy stays on your credit report for ten years, and really drags the credit score down, while delinquent accounts and missed payments stay for seven years. After that they are supposed to be removed. The good news is even after a black mark, if you practice good budgeting and debt payment, your credit score will improve even during those time frames.

Q: How do I find out my credit score?
A: According to law, you are allowed one free credit report per year. There are three major credit reporting agencies, and they may have different scores, so you'll want a copy of your reports from Experian, Trans Union, and Equifax. Some credit cards also offer a free service of showing one company's credit score for you on a monthly basis online.

Q: Does every late payment become a black mark?
A: No. Most payments have to become 30 days late before the creditor reports it, but some may report immediately.

Q: Is every loan going to be on my credit report?
A: Not necessarily, as commercial loans could be an exception, but almost every credit card and loan you have over your life will be on the report. Some accounts closed for a certain length of time will be removed (especially delinquent accounts after 7 years, and bankruptcy after 10).

Q: Do things get worse after 30 days?
A: Yes. At 60 days another mark is added, as well as at 90 days, 120 days, and 150 days. Each new mark is worse than the one before, and hammers the credit score even harder. Even if you are 30 days late, you want to be sure to pay off that debt as soon as possible to avoid further damage. Bouncing back from 30 days late is far easier than bouncing back from 150 days late.

Q: So what happens after 150 days?
A: At this point the debt will be handed over to collections, which will also appear as yet another damaging mark on your credit score. Not only this, but now your have collections coming after you and harassing you. In addition, if this debt goes completely unpaid and the creditor officially "charges it off," you get another black mark that is the worst you can get on your credit score short of bankruptcy. In addition, they can still try to collect the debt, anyway, so you're not off the hook.

Q: What if I already have a bunch of charge offs?
A: There's no question then that you have terrible credit, and if you're on the verge of bankruptcy anyway, it's time to file and take the hit and start rebuilding.

Those are seven common questions and answers for consumers who have questions about their credit score, and should help give you a good idea of what to look for when checking your credit score.

Article Source: http://www.articleadventure.com

Thomas Boston, Principal of 825credit.com is a personal finance expert and consumer credit advocate who specializes in responsible credit management and creation. He helps clients for free to reverse damage done by identity thieves plus late payments, chargeoffs and collection accounts. He can be reached online with comments,

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