What steps do you follow to check a credit report, and what specific items do you look for as potential red flags?

Question

Accepted Answer

I follow a systematic approach to evaluate credit reports, identifying key red flags that indicate potential risk.

Verify personal information: Ensure the name, address, and Social Security number match the applicant's details.
Check payment history: Look for late payments, defaults, or accounts in collections as indicators of financial irresponsibility.
Review credit utilization: A high credit utilization ratio (over 30%) can signal potential over-reliance on credit.
Examine inquiries: Multiple hard inquiries in a short period may suggest financial distress or aggressive credit-seeking behavior.
Assess account age: A short credit history can be a red flag, indicating a lack of experience in managing credit.

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