At Approved Loan Store, we work with a wide range of customers every day. For some of them, they have gone through the car buying process before, and this is their second or third car. For others, however, we are helping them purchase their first car. Buying your first car with good credit can be intimidating, but buying your first car with poor credit or no credit can be downright frustrating. Over the next few weeks, we will answer some of our most-asked questions here on the blog, and we encourage our readers to comment below with any other questions you would like us to address!

Question: I just looked at my credit score for the first time in, well, forever! Wow, I didn’t expect it to be that low! I pulled a free copy of my credit report, but after looking over it, I realized that I don’t know what I should be looking for. What accounts on my credit report are bringing down my credit score?

Answer: First off, here is a tip for reading your credit report. Your credit report is basically a compilation of your lines of credit, both open and closed, and a detailed account of your payment history on each account. The first thing you want to do before worrying about late payments, charge-offs, etc. is to review the list of accounts and see if anything doesn’t look familiar. Identity theft is more common than you might think, and your score could be low because someone opened accounts in your name. If you don’t recognize an account, it is important to start the dispute process with the credit bureaus immediately either on your own or with a professional company like My Credit Specialist.

If all of your accounts check out, the next step is to look over your payment history. Were you 30 or 60 days late on your credit card? Also, don’t forget to look at the status of the account. Typical status descriptions include “In Good Standing,” “Open,” “Closed,” or “Charged Off.” The best possible status for an account is open and in good standing. Closing an account like a credit card can actually hurt your credit score because you have less available credit, raising your credit utilization. You can read more about credit utilization and how it affects your credit score here (http://blog.approvedloanstore.com/2013/08/auto-loan-faq-how-is-my-credit-score-calculated/).

Finally, take a look over your accounts and find the oldest open account. Part of a person’s credit score is based on the length of their credit history. If your oldest account is only a few years old, the best way to improve that score is continuing to pay it on time, apply for other types of credit like an auto loan, and have patience.

Still have questions about credit and the Approved Loan Store program? Give us a call toll-free at 877-217-2217, or visit us online at www.ApprovedLoanStore.com. You can also get more car buying and credit tips by liking Approved Loan Store on Facebook, following Approved Loan Store on Twitter, and subscribing to Approved Loan Store on YouTube!

Image courtesy of digitalart / FreeDigitalPhotos.net