• 28
  • November
    2011

In our last couple of posts, we mentioned that credit card companies look at a number of factors other than your credit score in determining whether to accept an application. In this post, we want to point out the importance of maintaining an accurate credit report. Anybody who has been through bankruptcy does well to understand this information.

There are a number of reasons why it is more important to focus on improving your credit report rather than focusing only on your credit score. The primary reason is that your credit score is based on your credit report.

The following are other reasons why it is important to focus on your credit report rather than your credit score:

  • While you cannot dispute your credit score, you can dispute parts of your credit report
  • Your credit score will differ depending on the reporting agency and scoring model, making it harder to be accurate
  • Your credit score is a representation of the information contained in your credit report
  • Insurers rely on information taken from your credit report
  • Potential employers will be looking at your report, not your score
  • Your report may tip you off to identity theft

Tracking your credit report is free and relatively easy. It can be done through the website AnnualCreditReport.com and selecting a major reporting agency to receive the information through. When you get access to your report, you should ensure there are no errors. Contact both the credit bureau and the company that provided the information to have them correct any errors.

In addition to ensuring the accuracy of your report, understand that negative financial information will remain on your report for a number of years after it takes place. Bankruptcies remain on your report for 10 years.

Source: creditcards.com, "Why your credit report matters more than your credit score," Marcia Frellick, November 28, 2011.