Personal Finance

Importance of a credit report

A credit report shows the financial history of an individual. Lenders review your credit report whenever they decide to approve your loan application or not.

What is included on the credit report? Payment history is a very important factor included on the credit report.

Late payments will negatively affect your credit ratings for many years. Bounced checks also show up. All the information from credit cards, department store cards and loan payments, such as auto loan and home mortgage payments, will show up on your credit report.

Maintaining a good credit report and credit history is in the advantage of everyone. Not only will your eligibility for loans be decided by your credit report, it will also determine the interest rate credit card companies will charge you.

This is certainly a great advantage nowadays to be able to view your complete credit history. Everyone is eligible to receive a copy of their credit report. Being educated on your credit transactions, you can figure out what is holding you back and where you can improve to build a good credit rating. This can make you a more informed user of credit.

Acquiring a credit report can help you find out what your lenders are looking at when they decide your eligibility for a loan. It can also help you assess mistakes on your credit report. If you feel you are unjustly being turned down for loans, it may be because of mistakes made on your credit report.

Reviewing your credit report frequently can allow you to catch mistakes early before they mess up your credit ratings. If there are mistakes you can start the process of correcting those mistakes and restoring your credit.

Also identity theft, which is a growing problem in this country, can be stopped if it is spotted early. Once you have your credit report you can review it for any unauthorized charges.

Many people neglect their credit, despite its importance. People often start building their credit report early in college, when they acquire their first credit card. Unfortunately this is also the time that you may be adding negative points to your report through a misuse of credit.

If your credit report is not particularly impressive, you can start the credit repair process.

  • Make sure you pay all your bills on time.
  • Start getting rid of the debt you have accumulated.
  • Reduce the number of credit cards you hold.

Wise use of credit can keep you debt free and in possession of a good credit report. This in turn can allow you to buy on credit in the future. A good credit report also means low interest rates thus lighter bills and extra money for you.

Building a good credit rating will take time and effort. Often negative points on your credit report will take years to be deleted.

Now you even have the right to view your all-important Fico score on whose basis lenders determine whether you have good or bad credit. The score is calculated from your credit report.

While a majority of people are eligible to receive a free credit report, alternatively you can always get a copy of your credit report for a small fee. Contact a credit bureau to find out how you can receive your credit report.