What the Negative References on a Credit Report Mean?

July 3, 2012 by  Filed under: Credit 

So you check your credit report once a year, just like you are supposed to. You request your report from the big three credit reporting agencies and try to find negative items you need to dispute. But how do you know what you’re reading?The problem is they are not always easy to read. Here are some things you need to know when looking for and trying to understand negative references on your reports.

Credit Inquiries, Public Record, and Collection Items

It’s a good idea to understand what kinds of things get reported. For example, many people don’t realize that each time they apply for credit it gets recorded and usually results in a small temporary drop in credit score. The credit bureaus will include debts reported to them, but will also consult the public record for debts such as foreclosures, bankruptcies, and wage attachments.

Separating Satisfactory From Negative Items

One thing that makes it easier is that each of the reporting agencies separate the positive accounts (those in good standing) from negative items (late pays, charge offs, etc.). This allows you to concentrate on the negative items so you can choose which ones you want to dispute.

Reading the Codes

Each reporting agency has different formats and codes. There are websites that will interpret the codes for you. Enter the name of the reporting agency and terms like “codes” into your favorite search engine. When tracking down late payments, though, they are all pretty consistent. You will find a square with 30, 60, 90, or 120 in it. You only want a zero in that box, and a green OK shown under status. You also want the notation that you are “never late.”

“Charged Off” – “Bad Debt” – “Placed for Collections” – “Account Closed by Credit Grantor”

If your account went more than 120 to 180 days without payment, you will see “charged off,” “bad debt,” or “Placed for collections.” This means that the credit card company has decided that the debt will not be paid off and has sold the debt to a debt collector. Account closed by grantor: if you default on other cards, a creditor might close off access to additional credit.

“Account Balance” – “High Balance” – “Date of Last Activity”

These are all categories you are likely to see and should understand when looking for items to dispute. Account balance is the amount owed on the loan. High balance is the most you ever owed on the loan. And date of last activity (DOLA) is the last date any account activity occurred.

It’s important to provide positive references for credit card repair because negative references can spoil your entire effort to repair a credit card. Please visit us to find more about it…

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