Committed to World Class Service
Community First National Bank - McAllen, TX
Committed to World Class Service

Understanding Your Credit

Understanding Your Credit Your credit report offers a snapshot of your financial life and may be accessed by anyone from potential employers to lenders. Plus, the information it contains determines your credit score.

By understanding how to read your credit report, what comprises it and how to monitor it, you'll be better equipped to handle your finances overall.

There are three major credit bureaus-Experian, Equifax and TransUnion-which collect information from public records and companies you do business with. They use that information to create your report.

This report has four sections:

  1. Personal information: This section includes your name, address (as well as previous addresses), Social Security number and date of birth.

  2. Credit history: This includes all of your open and closed credit accounts and your track record for repaying them.

  3. Public records: This lists any public records related to your finances, such as property liens or bankruptcies. It's just financial records, though, so any nonfinancial public records you may have, like speeding tickets, won't be on here.

  4. Credit inquiries: This section shows everyone who's checked your credit in the past 2 years-landlords, employers, lenders and more.
A good credit score typically translates into a lower home loan interest rate.

The higher your credit score, the more likely you will pay your debts in a timely manner. The lower your credit score, the less likely you will make payments on time. For those with lower credit scores, lenders may adjust home loan interest rates to accommodate for the additional credit risk on issued loans.

If you wish to improve your credit score, there are many ways to do so! Here are just a few:

Focus on recent derogatory credit.

Concern yourself most with past due balances, charge offs and collections that have occurred in the last two years. Items more than two years old have less impact on your current credit score. In fact, if you pay off delinquent items over two years old, you may actually lower your credit score.

Keep existing credit card accounts open.

Your established credit history matters. If you have old credit cards that you don't use often, you still have the benefit of the history they represent.

Try to distribute debt evenly across your credit cards.

If you can't pay off all your debt at once, try to keep balances as close to zero as possible, aiming for under 30 percent of the available credit limit. Also, if your credit provider increases your credit line, the ratio of debt to available credit is automatically reduced.

Remove errors on credit reports.

Check your credit reports for any errors and delinquent information. Follow the dispute process to challenge any inaccurate information-credit reporting agencies must respond to you in 30 days.

If you or anyone you know has questions regarding available home loan options, please get in touch. we're happy to help!
Copyright © 2018 CFNB McAllen
Website designed & hosted by Outdoor Resources, LLC