Check Your Credit Report

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I wrote this on a duck hunting forum I am on:

"For those seeking a car loan and/or mortgage. Read this and let's discuss. I will admit I am more careful with my credit history now than I ever was.

http://finance.yahoo.com/loans/article/111025/what-it-takes-to-get-a-loan?mod=loans-home

Here's a story that might or might not be applicable to your situation. First, let me preface by saying a credit report is based on a bunch of algorithms or formulas that weight how important a particular factor is in relation to your total available credit. For example, more weight is emphasized on a home mortgage because usually that is the biggest loan an average person will ever repay in his/her lifetime. I pull my credit report at least once a year sometimes two times to check for stuff that looks funny. I pulled it in 2006 and noticed that I had a collection or money owed on there for $354 to a medical collections company. I was outraged. I then started getting calls from the collections company. It was apparently from medical bills that I allegedly did not pay that the insurance didn't cover back in 2004. I never once got a bill from them. Well I paid the balance off thinking that this would come off the credit report. WRONG. I pulled the credit report again and noticed it was still on there. According to the Fair Credit Reporting Act, collections report to your credit file for seven years. Now here's the grey area part. For some people this can affect your score a lot and for some it might be one point. For someone like me who does not have a lot of credit history being that I am 26 it would affect my score more than if it was someone in their 40's or 50's who has solid repayment history and tons of credit availability. The reason is simple. To the credit reporting agencies I am more risky because I am younger and do not have the credit history that older people have. So, for all you young duck hunters like me two lessons can be learned here.

1. Even though you think your medical bills have been paid. CHECK AGAIN. Call the hospital and get something in writing if you can that states no further balance is due. I have friends that this same thing happened to them.

2. If you do have a collection on your credit report, PAY IT, UNLESS you have proof that you do not owe that money. If that's the case I would hire a credit repair guy to fix this collection for you. More times than not they know someone that works in Equifax, TransUnion, or Experian that would rather just take it off than to have to deal with you or them. Also, this does not apply to just health care. It also applies to rent from a landlord that you skipped out on, damages in an apartment or rent house, unpaid cell phone bills, unpaid electricity bills, unpaid water bills, unpaid gym memberships, or unpaid work performed on your house/car/equipment (which are called mechanics liens). There are probably more but those are the ones I saw when I was looking at 10 credit reports a day as a banker.

I know this is probably stuff you older guys know already but for someone looking to finance a house and start a family this could be the determining factor. Typically mortgage lenders are looking for a credit score of above 620. Bottom line is always CYA. Good luck and watch out for those identity thieves."