I run credit reports every day: Here are the 6 most common mistakes I see #Budget#money September 12 | Guest post by Jill Janosek All you need is good credit sweater by longstonenewyork I work for a landlord and part of my job is screening tenants. That means I run credit reports every day; and decide whether or not an applicant is approved. Most of the time, when someone is rejected it is because many people don't understand the basics of how credit reporting works. So here are some tips on the most common mistakes I see… 1. Understanding the requirements Before you are about to have your credit ran, the first thing you should know are the requirements. Most places — whether it is a landlord, a credit card, a utility company, or anywhere else — has a set of standards. Each industry has their own government requirements along with industry wide standards. Do some research and be familiar with what is common in your area. Before you apply, ask what those standards are specifically with the company you are applying with. If you are aware of your current financial situation, most of the time you will know before running the report if you will be approved. If the person you ask is unsure or gives a vague answer, ask to speak to the person who will be scoring the reports. 2. Not knowing you have credit By far the number one thing I hear from potential applicants is that they don't have any credit. Of those people about 75%-80% do have credit, sometimes long-standing accounts. Before going to apply, check Credit Karma, or a similar site. If you already have a credit card, check out your online account — many card companies include the additional perk of being able to check your score once or twice a month! Not only may you have a collection or open account you are unaware of, but is also a great way to check for any fraudulent activity under your social security number. Related Post How do you curb impulse spending? The combination of a steady income, no huge financial responsibilities other than rent, and the ease of online shopping has meant that I have been... Read more Also be aware that there are multiple credit reporting agencies. You may have a high score on one agency and a low score on another. So ask where the report will be pulled from, so you can compare your report to their requirements in the most accurate manner. 3. Even having your credit run will affect your score Before handing out your social security number, ask what type of pull they will do on your credit. If they say it is a soft pull it will not affect your credit nearly as much as a hard pull. You will see soft pulls with things like utility companies. But, if it is a hard pull, expect it to make a difference in your overall score. Every hard pull you have will stay on your credit report for about two years. A big mistake I see typically with younger applicants is that they will go and apply for a large amount of credit all in one day. Applying for multiple credit cards, car loans, or several apartments, in a short amount of time might seem savvy for the sake of comparing offers, but each time you have a pull on your account it will slightly lower your overall score. Many big name stores will offer a one time discount if you apply for their store card. This transaction usually happens so fast that people don't even think beyond the discount, but be wary of how that 10% off might affect your chances of obtaining needed credit in the future. 4. Medical bills, student loans, and parking tickets Collections, or accounts that were left to go unpaid do more damage than just the annoying phone calls. If you have a new collection on your account it will lower your overall score, but it will also be seen as a separate infraction to the person reviewing the report. Many companies do make exceptions for student loans and medical bills, and a few will even make exceptions for parking tickets. Be sure to ask about any company policies regarding these common collections. 5. Lifespan of collections A typical collection will stay on your report for seven years. In the past I have seen collections pop up from 15+ years ago. If your credit is run, and they explain that a collection was part of their decision, and it is older than seven years, ask them to talk to their finance manager. Many times they will take that out of your scoring factor, and it can make a difference. Please note: The person running your report will rarely contact the credit bureau on your behalf. So if something like this does come up it would be your responsibility to contact all of the agencies to have it officially removed from your record. 6. Recent payments If you have been recently rebuilding your credit, wait 30-60 days after your most recent payment before going to have your credit run. Most companies do not report to the credit companies daily so you will want to wait until that information actually hits your report, removes the amount owed, and ups your score before having someone run you through. Having your credit run is always a nerve-wracking experience. Just keep in mind that knowing what is ahead makes the process much easier. I know every time I have had my report run I feel like I am being judged by strangers, but that is not usually the case. Often the people scoring are just running the numbers though the system and know that even if there are some blips on your report that you are more than just the numbers on the screen. Reporter Name * Reporter Email * Original text Enter the original text here. Edited text* Enter your suggested copyedit here. Notes You can add a note for the editor here. * Required information. Fix Typo Jill Janosek My name is Jill and I am from the south Chicago Suburbs! I work in housing by day and as a flow artist by night specializing in hoops! PREVIOUS How can I get people to stop complimenting my weight loss? NEXT Follow Offbeat Home on Instagram right meow! Show/Hide comments [ 12 ] This post is great! Thanks for sharing! 6 agree Reply I'm really curious as to how US credit compared with UK in terms of your rights and protections. Here, anything older than 6 years falls off your credit report and isn't visible any more. And if you haven't acknowledged a debt in 6 years in most cases it's unenforceable. Most people, like stores or energy companies or employers or landlords, can only do high level checks, so can only see if you've had a CCJ or insolvency procedure; only people involved in lending you more money can see your ongoing credit commitments. The most important thing about credit reports is to make sure you get hold of yours semi-regularly and check the information is up to date. The last thing you want is to find out you've been turned down for a mortgage because it turns out you're still financially linked to your indebted ex, or a fraudster has been using your address to open loads of credit cards. 1 agrees Reply Great information, but zoinks! Someone forgot to send this article through copy editing. Reply There is a cool little 'Fix Typo' button on the page for making constructive suggestions for changes. I've used it before and it really works! 1 agrees Reply Yeah, we got a bunch of FIX TYPO submissions on this one yesterday after it published. After I beat Megan with a soggy noodle, we made all the submitted corrections. We do our best to make sure guest posts get solidly edited, but sometimes we make mistakes… and we love it when readers use the FIX TYPO button to help us get things fixed up! Thanks to all our reader/copyeditors. 🙂 More info about ye olde button: http://offbeatempire.com/copyediting 1 agrees Reply Uggggh the whole credit system is such a scam. I have basically NO credit, because I didn't get a credit card when I was in college and now most places won't give me one – instead I've been *gasp* living within my means and paying all my bills on time every single month of my adult life. How awful! How financially irresponsible! The whole "even checking your credit score lowers your credit score" bit really clinches it, frankly. Such bullshit. I did finally end up getting a TJMaxx card just so I could start building a little credit up. But I'm pissed off about it. 14 agree Reply It is bogus. When I got married to an immigrant (thus no credit in the USA), I put him on my bank account and credit card (as a joint account holder, not just an authorized user) so he could start building credit and we could eventually buy a house. When we started looking at houses and mortgage companies a year later, we found out that his credit score was actually higher than mine because as soon as I put his name on the accounts he was credited (no pun intended) with my entire history on those accounts and I had a car loan on my own (hence why mine was lower). So anyone looking at our credit scores would think this guy who had never managed any type of credit in his life, and never had more than a few dollars to his name at a time to handle was less risky to lend to than someone who had a 10 year history of holding a credit card while living within her means and paying it off every month but held a small loan (like less than my bank balance small…I only had it instead of paying outright to help build credit). 2 agree Reply It's definitely bogus that checking your credit lowers your credit. And credit is definitely a flawed system. My sister couldn't rent an apartment without a cosigner when she graduated, because she lived on campus in college and didn't have a credit card so not enough good credit (while also having no BAD credit). I live within my means and pay my bills on time, but some credit cards come with some good perks that you don't get from using your debit card or cash everywhere. Granted some people can't keep from spending above their means, but credit cards themselves are not inherently evil. Just like the difference between putting your money in an interest bearing account vs stuffing it in your mattress. You start both with the same amount, but there are ways to make your existing money work for better you. Reply My parents put me on their credit card when I was 16, and however they did it, I automatically received my Dad's excellent credit score. When I went to buy a car at 22, my first big purchase, they were blown away by my score and immediately stopped trying to talk about different finance rates and gave me 0% financing. I didn't even need anyone to co-sign. The same thing happened when my husband and I went car shopping several years later. I'm sharing this because I was so blessed by my parents doing that, and I hope it may help some others with their children. Obviously it requires certainty of trust, but it is really wonderful to start out with a wonderful credit score to shepherd, rather than trying to build it yourself. 3 agree Reply Yup, same here. That credit card was only for gas, running errands my mom sent me on, and emergencies (like car broke down, need a tow) but my parents charged their household expenses to it, too, so it definitely boosted my credit. And this is why my "longest credit line" on my report is almost as old as I am and American Express thinks I've been a member since I was 8. Reply As I mentioned below, a lot of people don't recognize the trust goes both ways. Most just worry about whether or not the kid will ruin their score but if your parents suddenly screw up and forget to pay a bill, that will impact you too. 🙁 Unfortunately a lot of kids looking to get a jump on credit with the help of heir parents are ill equipt to know this or to be able to recognize their parents' levels of responsibility. I doubt it often causes huge problems, but it is something that could potentially cause issues. Reply One thing I wish I knew about credit when I was younger is how much being simply an "authorized user" can effect your credit. One would think if you're not the bill-paying primary cardholder that you're not impacted by the primary cardholder's actions. But I suppose if it helps build you credit it makes sense you'd get both the positive and negative from it. Anyway, long story short, my dad had one missed payment on an account where I was an authorized user, and even though I am now off that account the late payment still is listed in my history. But the good thing about having only been an authorized user is in the future the only thing he can do to the account that will impact me is closing it. Speaking of, I think the other thing people don't realize is closing an account could hurt your score. So if you decide down the line you want to downsize the number of cards you have… whoopsie. No so simple. Think about THAT whenever a clerk tries to sell you on the store card. Reply Join the conversation Cancel Reply Your email address will not be published. Required fields are marked *Comment No-drama comment policy Part of what makes the Offbeat Empire different is our commitment to civil, constructive commenting. Make sure you're familiar with our no-drama comment policy.