Your Credit Report

Conscientious consumers are sometimes startled to learn they've been turned down for a loan or credit card, not because they're unemployed or lack savings, but because they lack a credit history.

These people are:

Teens College students are showered with credit card offers because lenders know that their earning potential will soar after graduation. But those who bypass college may find it difficult to get such offers or build a credit history.

Retirees, widows, divorcees Retirees may have sterling credit, but if the mortgage was paid off years ago or a deceased spouse managed household finances, the widow(er) may find that an inactive or nonexistent credit history can keep them from buying a new car, for example.

Immigrants Regardless of their bill-paying history in their native countries, immigrants must start to establish credit history from scratch when they arrive in the United States.

"Conscientious objectors" Some people prefer paying only in cash because of personal beliefs or an anti-consumerism philosophy. But they risk a cash crunch if unanticipated expenses arise. The wealthy Highly affluent people may not often need good credit because they usually pay cash. In an emergency, though, their money could be tied up in illiquid investments and not readily available.

There are many options for young people and others who recognize the importance of establishing a solid credit history based on responsible borrowing, on-time bill payments and disciplined spending habits.

Options include: - Secured credit cards - Student credit cards - Debit cards - Prepaid cards - Joint credit cards - Authorized user cards - Co-signer loans Remember, lenders purchase borrowers' credit reports from credit reporting bureaus to help decide if they should extend credit, whether it's credit cards, mortgages, car loans, or student loans.

Landlords and employers may also run credit checks to determine what kind of risk you are. Familiarize yourself with what lenders are looking at by reviewing a free credit report annually. So, what does a credit report contain?

1) Personal information This includes basic details like your Social Security number, current and past addresses, and date of birth.

2) Your credit history This contains detailed information about credit accounts in your name or accounts that list you as an authorized user. This information, reported by creditors, may include the date accounts were opened, loan balances, credit limits, and payment history. Closed and inactive accounts may also appear.

Inquiries:
Whenever third parties (anyone other than you) pull your credit report, the credit bureau makes a notation here. Public Records: Government agencies will report bankruptcies, overdue child support payments, and liens.

3) Personal payment history This section summarizes your payment history for credit accounts. You'll see mortgages, installment debt, revolving accounts (such as credit cards), and accounts in collection.

4) Public information This section provides details on matters of public record, such as bankruptcies, tax liens, foreclosures, or judgments.

5) Inquiries This area lists businesses that have inquired about your credit during the last two years. Typically, this happens whenever you apply for credit.

6) Creditor contacts Here you'll find contact information for current creditors. As you can see, credit reports contain a wealth of personal data that can have a lasting impact on your financial household, dictating the interest rate you'll pay for loans. In fact, there's so much history there, dating back to the time you borrowed your first $3,000 for a second-hand Mustang, that you might start thinking your credit report contains everything but the kitchen sink.

To set your mind at ease, here's what's not revealed in your credit report. - Your gender - Your race or national origin - Your salary history (although the names of previous employers may show up) - Your religious affiliation - Whether you're up to date on your dog's vaccinations - Information on your savings or investment accounts - Your medical history (although a medical credit score is currently in development) - Any criminal record you may have - Your family background - Whether you're a stingy tipper - Your voting record or voter registration - Any purchases for which you paid with cash or check - Your jury duty records - The $50 you owe to a bad bet on the Red Sox - Chapter 7 bankruptcies that are more than 10 years old - Speeding tickets (as long as you paid them) - Your credit score (which you'll have to purchase separately to see) While the items above are legally restricted from appearing in your credit report, someone reading between the lines could still deduce some personal details.

Medical conditions, for example, while not reported directly, could be guessed at based on the name of a medical creditor, like the Greater Milwaukee Substance Abuse Medical Center, when the debt shows up on your report.

For many negative marks in your credit past, the magic number is "7," meaning that these items disappear from your credit report after seven years: - Charge-offs or debts placed in collection - Lawsuits and judgments (unless the statute of limitations hasn't yet expired) - Chapter 13 bankruptcies, provided they were paid in full (10 years if not paid as agreed) - Foreclosures - Paid tax liens If you have unpaid tax liens, you'

re on the hook forever. The same holds true for unpaid federal student loans.