In order to determine a consumer's credit worthiness, creditors and lending institutions have come to depend on credit reporting agencies. Credit reporting agencies supply individual reports that provide consumer specific information for lending purposes. With the advent of technology, most creditors now have automated systems that provide them direct access to credit reporting agencies. In most cases, credit agencies or credit bureaus provide personal, legal, and account history related information. In recent years it has become more common for lending institutions to use multiple credit reports to meet lending requirements. Besides meeting lending requirements, multiple reports also provide additional security measures. Using multiple sources for reporting purposes provides a more comprehensive and complete background check on a consumer's credit and spending history.
Traditionally, when a consumer submits a credit application, creditors forward that information to the credit reporting agencies. This is how credit reporting agencies are able to accumulate personal information on people. This information often includes items such as the consumer's name, address, social security number, employment information, marital status, telephone number, and possibly income. By utilizing credit reports, lending institutions are able to cross-reference the information that a consumer provides on a credit application with the information that the credit reporting agencies have on file. Some credit reporting agencies even hire companies and or contractors to research and verify that the information entered on a consumer's credit application is accurate and verifiable.
Most credit accounts, on a monthly basis, are reported to credit reporting agencies; these reports will reflect a payment and account history for all credit related accounts. The information that a credit reporting agency provides is known to as a tradeline. On a credit report, there is traditionally a tradeline for every creditor that reports account information to the bureaus.
As I mentioned earlier, not all lending institutions report to the credit bureaus; however, most do. The major credit bureaus provide reports which include a consumer's payment history in 30-day intervals. This is due to the fact that most consumer billing cycles follow a similar payment pattern. Most lending institutions have a proprietary set of rules and guidelines that govern the thresholds at which they report consumers as being delinquent in their payments. It has been my experience that some lenders have gone as far as not report delinquency until the consumer's account reaches 60 days past due. Other lenders are much stricter in their guidelines and will report delinquency at 30 days past due. Traditionally, a credit report will provide a detailed summary of any delinquency you have had with your creditors. This is measured by the number of times that you fallen more than 30, 60, 90, and 120 days past due. Many of these credit reports use a rating system that assigns a specific status code to each 30-day period of missed payments.
In the consumer lending industry, this method is often referred to as the simple method. For example, an R-1 rating represents a consumer account that is current or an account that was paid properly and that is in good standing; an R-2 rating indicates that payments were paid 30 days or more after the due date but less than 60 days after the original due date; an R-3 rating represents that the bill was paid 60 or more days after the original due date but is less than 90 days past due; an R-4 rating shows that a consumer has fallen 90 or more days past due but is less than 120 days delinquent; an R-5 rating indicates that a consumer has fallen 120 or more days past their original due date; an R-7 rating shows that a creditor was forced to repossess collateral on the account and an R-8 rating means that the account was referred to collections in an attempt to recoup payment. The rating of R-9 is traditionally used to show that a debt or debts have been discharged through bankruptcy, have been repossessed or foreclosed upon, or are currently in collections.
Alan Barnes IAPDA Certified Debt Arbitrator and President and CEO of Debt Regret, Inc. http://www.debtregret.com
INTEREST BEWARE, THERE'S SAFETY IN NUMBERS!Note: The following is part... Read More
If you have never heard of a FICO score before,... Read More
Your credit score can either haunt you or reward you.... Read More
If you've ever applied for a credit card or loan,... Read More
Most of us want a good credit report to obtain... Read More
FACTA stands for Fair and Accurate Credit Transaction Act. FACTA... Read More
One of the biggest problems people have in these modern... Read More
Let's face it, having credit is no longer a choice.... Read More
There are no secrets to repairing your credit. Many shady... Read More
Spending HabitsSo you've just got your credit card. The first... Read More
As identity theft becomes more prevalent, the need to regularly... Read More
Credit cards have both benefits and drawbacks. It is wise... Read More
There are always some companies that have past due invoices... Read More
Credit Counseling and bankruptcy are both ways to relieve the... Read More
It is a well-publicized fact that more of us are... Read More
So what do you look for when applying for a... Read More
As a young student I feared getting bad grades because... Read More
Most families in America today have a credit card; some... Read More
A bad credit history can sometimes seem like a curse...... Read More
"Erase Bad Debt !""Remove Negative Items From Your Credit Report"You've... Read More
If you've ever applied for a credit card or loan,... Read More
Ever wondered what is Credit Counselling? There are occasions when... Read More
The nightmare of identity theft strikes an estimated 750,000 people... Read More
Ever wonder how a creditor decides whether to grant you... Read More
Have you ever wondered why your credit card bill is... Read More
How many of you bank, shop, or transact other business... Read More
Are you one of the thousands pulling your hair out... Read More
There is a lot of confusion surrounding UK credit ratings,... Read More
Your credit score may just be a little number, but... Read More
Understanding credit report scores is important when you see your... Read More
While working through my own debt situation, and helping others... Read More
There is a big difference between looking after your own... Read More
If gold medals were awarded for marketing consistency, the credit... Read More
Here's a dirty secret, today's "non profit credit counselors" are... Read More
Did you apply for a personal loan only to be... Read More
Identity theft is the fastest growing crime in America, according... Read More
Check 21 is the common name for the Check Clearing... Read More
It wasn't all that long ago that lenders blatantly discriminated... Read More
Joint debts remain joint debts.Both spouses signed a legally binding... Read More
Credit cards can be a very quick way of getting... Read More
By Federal law, you are entitled to one free credit... Read More
You've just opened your credit card bill and attached to... Read More
Which of the following is the biggest threat to your... Read More
You might not know it, but every time you take... Read More
FREE credit checks or free credit reports. What are they... Read More
In addition to the APR (annual percentage rate) and the... Read More
Nearly 20 years ago I worked for a small consumer... Read More
Even if you have heard of a credit report, you... Read More
This summary of the Fair Credit Reporting Act will explain... Read More
If you have ever fallen behind on your debts you... Read More
A lot of people spend more money than they can... Read More
Have your read your credit card contract through completely? Do... Read More
You can still save money on a Bad Credit Loan... Read More
The all important credit score! It determines the amount of... Read More
In August, 2004, the Federal Trade Commission issued their findings... Read More
For people with a spotty credit history or bad credit,... Read More
Mortgage loans are some of the most difficult loans to... Read More
Credit card balance transfer involves using a credit... Read More
Make Money from StoozingStoozing, this is a sophisticated method of... Read More
With identity theft statistics currently at an all time high,... Read More
Your credit file may not reflect all your credit accounts.... Read More
Somebody once said, "There is always a way of knowing... Read More
In this week's article, I am going to offer some... Read More
It's no surprise that thousands of Americans are victimized by... Read More
A line of credit, roughly defined, is the amount of... Read More
Here are some useful credit card tips for you to... Read More
Credit |