Sometimes it’s nice to have a friend in the business, so to speak.  As a credit union employee, I use credit reports often to make decisions about member accounts.  But I’ll admit that there’s plenty I don’t know about the world of credit reporting.  That’s why I invited Laura Hooper, our local Equifax representative, to speak with the employees of one of my most valued credit union clients, Cracker Barrel Old Country Stores, when they invited us to do a Lunch and Learn seminar about credit.  Laura presented a very informative session on “Understanding your Credit and Protecting your Identity” at the Cracker Barrel corporate offices in Lebanon yesterday.  Since her information was so great and timely, I thought I would give you her answers to some of our member’s questions here.

How long does information stay on my credit report?  Charge offs and collection items drop off your report after 7 years.  Bankruptcies drop off after 10 years.

What’s really on a credit report?  The bulk of the info consists of details about credit accounts opened in your name.  Things like open date, credit limit, loan amount, balance, payment terms and history. 

What’s NOT on my credit report?  Checking and savings acount data, gender, ethnicity, religion or political affiliation, medical information, criminal records, and motor vehicle records.

How do I get a free copy of my credit report?  Avoid the sites you see advertised on television and go to the site that was developed by the Big Three credit agencies:  annualcreditreport.com

How is my score determined?  Payment history makes up about 35% of your score.  How much you owe makes up about 30%.  The length of your credit history makes up about 15% of your score.  New credit (how many new accounts, etc) makes up about 10% ofyour score.  The types of credit you use makes up about 10% of your score.  Your credit score is an evolving thing.  It might change daily as merchants and lenders report your information to the agency.

I’ve heard that allowing someone to pull my credit report may lower my score, is that true?  Somewhat.  A few inquiries (requests for your report) should do no harm.  And, if you’re car or home shopping, several inquiries by different lenders should do you no harm either.  Lots and lots of inquiries from different types of lenders could possibly affect your score by a few points.

How do lenders use my report?  Most lenders, like credit unions and other financial institutions, might use your report to assist them in determining the risk of lending money to you.  These types of lenders will also take into consideration factors other than your credit, including job history and income.  Your score also determines your interest rate in many cases as well.  Online lending engines are generally just loaning to you based on your score. 

How can I learn more about identity theft protection?  Visit http://mycrediteducation.com