3 Auditing Your Credit Report

Kenney Conwell here, and welcome to this module: Auditing Your Credit Report. So at this point, we’ve pulled our credit reports. At this point, we should have already established credit monitoring, and now we’re going to start getting into the nuts and bolts of the credit report. But before we do what I’m going to do is break down the sections that we want to really, really hone in on as it relates to cleaning our glass or cleaning our credit report. So here’s what we’re going to cover in this particular module. So, number one, I’m going to break down and explain the main sections of the credit report that we really want to focus on. Especially as it relates to the 35% or that payment history side of the credit report. So remember I was breaking down the algorithm, so the 35% and the 30% is what we have the most control over, but we’re really gonna focus on is that 35% and what makes that up.

We’re going to break down what are personal identifiers, so we know. I’m going to break down what are delinquent accounts so we know. We’re gonna break down what are derogatories/collection accounts so we know. I’m going to breakdown what are public records so we know, and then we’re gonna break down inquiries. So these are the things that cause your glass to be dirty and I’m going to address each of them in this particular module. So all that in your credit report by section. So these are the ones that we want to pay close attention to when it comes to that 35% payment history. Delinquent accounts, derogatory accounts, collection accounts, public records, and inquiries within the last two years. Now let’s hop right in. What are personal identifiers? Personal identifiers is your current name, your current address, any previous addresses, your current employer, and then any previous employers.

So what do we want on our credit reports? Well, we want to have one current name as it appears on your driver’s license or passport. That’s what you want to have because when you start sending the challenges out, we’re going to be verifying and you’re going to be verifying your identity with the bureaus based off that identification document. So you want that to appear on your credit report. If it does not appear that way, then we want to challenge it. Number one. Then number two, who knows how that other name or whatever popped up on your credit report. So we just want to completely remove it and just get that cleaned. The next thing goes, without saying, we want to have the same current address. So if the address on your identification documents, isn’t the same as the address on your driver’s license. It’s not a big deal.

You just want whatever your current address to be, to show up on your credit report and provide that documentation to the bureau. Previous addresses. This is a big one, and I even still fight with this myself. You want to remove all previous addresses associated with your credit report. And again, you only want to have one current address on report, right? Number one, those addresses could be, I’m not saying they are, but they could be associated with bad credit and negative accounts. Just like the old names could be associated with or the wrong variations of the name could be associated with bad credit. And then you only want to have one current employer, right? You don’t want to have multiple employers showing in your credit report. So all previous employers you want to remove from your report. And at this point, we’re going to break down exactly how to identify those employers and audit them.

So that’s a personal identifier explain. Number 2: What are delinquent accounts? Okay, well, this is a really good question. So delinquent accounts are defined in several different ways and depend upon which credit monitoring solution you went with. It’s really going to be defined the same way. So a delinquent account, they’re typically open accounts with missed or late payments, such as 30 days late, 60-90 days late, and or 120 days late. So a delinquent account could still be and typically is opened. So in some cases, depending upon the reporting, these accounts could be in good standing right now, but have missed or late payments reporting on them. So you could have made, you know, the last three months, four months on time, but you may have a status showing with missed payments, or you could just currently have a missed or late payment.

And now that’s causing your account to be in delinquent status. Hence, the reason the 30 -day late, 60-day late delinquent. So it’s not necessarily at a chargeoff level, but it’s at a level where we want to address it. So the most effective way to address this, and we’re going into this when we start challenging, but the most effective way to address this is pay your bills on time. Right? We’ve heard that before, but we just want to make sure we pay our bills on time. And then also we need to identify any accounts that are in delinquent status. So we can see what we need to do with this particular account, right before we start going out in a status of allowing it to get to a chargeoff or collection status, maybe we can save it. Maybe we can keep that relationship with that particular bank or creditor.

What are derogatory/collection accounts? So derogatory and collection accounts could be defined as one in the same, but derogatory accounts, these are typically collection accounts, repossessions depend upon your state, charge-off auto loans and or foreclosures again depend upon your state. And these are going to be those derogatory accounts. Now, if it goes past that 120 days late, you can have an account that’s in limbo. It can be half, it could be on a way from leaving delinquent status or going to do the derogatory status, right? Derogatory is the worst status to be in than delinquent, right? But it could be that way. Collection/charge off accounts. So you’re going to have two types of collections. Collection type number one is going to be the collection with the original creditor. So let’s just say I have a USAA credit card.

And for whatever reason, it had tough times life happened and I have not made my payments on that USAA credit cards maxed out. I haven’t made payments in like four or five months. It’s in collections with USAA. It has not been charged off as bad debt. So it’s still with the original creditor, or let’s just say, I thought I had $5,000 in free money. I was financially irresponsible. I charged up, I ran up a check as the future would say, and I just chose not to pay the bill and it’s still with USAA. You spent the money, right? So that’s still a collection account and it’s with the original creditor. So the approach with that collection is totally different than the approach with a collection account that’s with the collection agency, which leads me to the next point. So collection agency charge-off in collections means it’s been charged off as bad debt.

We’ll use the same example. USAA tried to collect on that debt from me for 12 months. They weren’t able to. Whatever the timeframe is. I know the timeframes change per bank. So don’t hold me to the timeframe, but let’s just say USAA got tired of my shit and I said, you know what? We’re not getting that money from that Kenney character. We’re going to charge this thing off as bad debt. So it gets charged off as bad debt. And it’s either bought by a collection agency or transferred to a collection agency. Again, it depends on the bank and what they choose to do. The moral of the story, it is no longer with the original creditor. It’s now with a third-party collections agency. So we want to know, Hey, look, is this account a collection account with the original creditor? Or is this a collection account with a third party, either way, they’re both bad.

It does not look good. You did not pay the money. We need to address it, but you need to understand the difference when you’re going through your challenge process. Now, what are public records? Public records, the most common one are bankruptcies. So you’re going to have a bankruptcy: chapter 7 chapter 13, chapter 11. That’s a public record. That information is public, right? So you want to identify, if you have a public record on your particular credit report. Then you have judgment. So a judgment might be, Hey, look, let’s just say that USAA chose not to charge that off. Okay. I said you know what? We’re going to stick it to Kenney. We want our money. So we’re going to follow us. We’re going to do a civil summons on him, and we’re going to take him to court.

Now, typically they don’t do that with lines of credit. They mostly do that with what I’ve noticed, personal loans, but if it’s that personal loan that installment loan, so to speak, they could take me to court and put a judgment out on my credit report. That’s going to be a public record. Tax liens is if I choose to whatever reason I choose to play Uncle Sam, or a silent business partner. They’re going to put a tax lien on a report, right? And it’s going to show up as a public record. And then depending upon the state, which is why I said in the previous slide in some states, repossessions and foreclosures could be viewed as public records. Generally, that’s not the case, but it just really depends on your state, but these are public records. We need to identify the public records. Because again, this is something that’s causing the 35% of our score to be dirty.

It’s that payment history. We need to identify it. Then the last thing that we have to audit for, our hard inquiries. An inquiry or our hard inquiries are typically applications for credit that appear on your credit report. So I went out and I applied for credit and when I go out to apply for credit, it’s going to show up as an inquiry on my credit report. Now, an inquiry does not occur when I just check my credit report. If I personally check my credit report. So if I go to any of the credit monitoring solutions that I outlined in the previous modules, if I pull my credit report, that’s not going to show up as an inquiry. It’s sometimes inquiries, we have there soft inquiries that show up on your report, or that’s a soft inquiry that somebody pulled your report, but it’s not going to show. A hard inquiry means

I went out and I applied for credit. I authorized that bank or that lending institution to pull my creditworthiness to see whether or not I will be a good candidate for credit from that particular institution. So that’s going to appear on my credit report. These are also another form of personal identifiers. Because again, we’re giving our information out on that report. So we’re putting our name, we’re putting our address, we’re putting our employer information. So again, this is another form of personal identifier that we need to make sure is removed if it’s not on there. Typically just so you know, if you don’t go out and try to challenge these, these stay on your report for two years, plus an additional six months. So if it’s an application for credit. Rental inquiry typically stays on your report for about 12 months, but just for credit inquiries, they’re going to show up there for two years plus six months. I recommend to challenge and remove all non-account holding inquiries.

So any inquiry for credit. This is big. If you went to go apply at a car dealership for an auto loan or your mortgage shopping, which you shouldn’t be doing either one of those, if you’re in this program, by the way. You need to just get your credit and your glass where it needs be, and then go out and call your shots. But if you’re applying for credit multiple times, I recommend that you challenge and you get those removed. If they’re not associated with an account. Especially don’t go out and apply for any credit if your credit is bad thinking that this other financial tuition is going to approve you. If your credit is bad, if it isn’t good, you’re going to waste an inquiry and that inquiry is going to be appearing on your report unnecessarily. You’re going to give yourself way more heartache and you look thirsty to banks, and this is going to be additional work for you to do.

So again, don’t go out and apply for any accounts unless we recommend them in this particular module. In this course, in this program, in this academy. Now it’s not recommended that you challenge inquiries are attached to open unsecured lines of credit (i.e credit cards) So if you have a current credit card and you just opened up that credit card, or you’ve had that card for like six months, don’t go out and try to challenge that inquiry because you could risk removing that account from reporting on your credit file and if it’s removed from reporting on your credit file and has a good history, that’s going to affect the algorithm that we already talked about. So don’t do that, right? Don’t do that because you don’t want to risk getting that removed. The thing you do want to do is, is challenging the inquiries that are not attached to unsecured lines of credit.

Now, what you could do, and I’ve done this before, and it didn’t affect my credit with the reportability of the credit I should say. I’ve challenged inquiries for like auto loans and personal loans because it was an installment loan, right? That loan was backed by some type of asset. So you could do that, but just be on the safe side let’s just say, just don’t challenge inquiries to open accounts, you know. Just keep it simple. So that being said, that’s inquiries and these are the sections of the report that we’re most focused on, and we’re all auditing and below this video, I have two cheatsheets. Cheatsheet number one, which is an identity IQ cheat sheet, which is I’m going to show you step-by-step how to audit your identity IQ report. I even have a cheatsheet Excel document that you can do all of these sections in and get your report audited. I also have a cheatsheet for SmartCredit. If you chose to do the SmartCredit route, and I’m showing you exactly how in that video and on that cheatsheet, how to audit your SmartCredit file, okay. Either way, get to work. I’m excited for you because the rubber is hitting the road and you are now getting into the nitty-gritty, the weeds, and getting clarity about where you stand and what exactly you need to do to start cleaning your glass. I will see you in the next module.