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Ever wonder how your credit score is calculated? Did you know what is contained in your credit report can end up saving or costing you money? An understanding of topics like these is critical before looking for Citibank Credit Cards. Without a good understanding of credit, you won't be able to determine if you're getting the best deal possible on a card. Here are all of the basics you'll need to know about credit when shopping for Citibank Credit Cards, then you can figure out what the right card for you is.
What a Credit Report Is
Credit reports are maintained by three bureaus: TransUnion, Experian, and Equifax. A credit report is a history of your past and present financial obligations. This means that it contains a documentation of any debts you've accrued and your payments on those debts. A credit report also contains a great deal of personal identifying information, like your name, birthday, social security number, history of residence, and even your employment history. Your credit report, by law, also must reveal any history of inquiries into your credit. In other words, whenever someone requests information about you through the bureaus, they must document it on your report.
How to Read a Credit Report
It's always a good idea to take advantage of the free annual credit report you are entitled to by law. Request your credit report from all three credit bureaus, then read over it carefully for any incorrect information. Not only will this help you catch errors, but it will also give you a better idea of what determines your creditworthiness. Your credit report contains four basic sections: personal information, credit history, public records, and inquiries. Here is more on how to read each section:
- Personal information. Check over it for any errors, such as misspellings or other discrepancies.
- Credit history. This gives a history of all your accounts in addition to the following information:
- Type of credit
- When account was opened
- Names on the account
- Outstanding balance
- Amount of loan or high limit or balance
- Account status
- Monthly payment minimum or fixed rates
- Payment history
- Public records. If you've never had a credit problem, then this section should be blank for you. Usually, if there is any information in this section, it is not good news for your credit. Things it might include are bankruptcies, liens, and judgments.
- Inquiries. Anytime someone accesses your credit report, it will be listed in this section. Don't worry about too many inquiries hurting your credit, as most inquiries are actually ignored in the FICO scoring model.
What Goes into a Credit Score
Here is a breakdown of how your credit score is computed:
- 35% comes from the history of your payment performance
- 30% comes from your present level of debt
- 15% comes from your credit history's age
- 10% comes from the pursuit of new credit
- 10% comes from the kinds of accounts on your report
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