First understand the fundamentals of Credit Report
We are all scared off with anything that spots our image permanently. This is no exception even with your credit report which is a permanent record of all your good and bad financial activities.
Your apprehension of credit report being a permanent demonstration is genuine if it carries a negative financial history. Since with a bad credit report, you as a borrower will face a hard time to get a loan from lenders, it will be extremely difficult for you to support yourself financially in an hour of need. Not just your credit report is the basis of your credit score, but also lenders assess it to find your repaying capabilities. As a result, lenders will either see you as someone not able to repay the amount credited or charge high-interest rate on the loan that they risk to give you.How are Credit Reports managed?
All that gets stored and maintained in credit reports, three U.S credit reporting agencies are responsible for that – Experian, TransUnion and Equifax. It’s better for you to know that whatever financial activity you make gets recorded in your credit report, permanently. Your accounts for the loans you take out, credit cards, mortgage, and so forth all are monitored by these credit-reporting agencies, along with the payment history of each of the account.
At regular intervals, reporting agencies contact the lenders with which you have accounts to keep a track of your outstanding balances and timely or delayed payments. Lenders also update agencies in case they send your account to a collection agency or write off a balance as bad debt. Simply put, your payment history of every account with different lenders will be marked on your credit report.What Information does a Credit Report collect?
Generally, a credit report includes the following sections of information.
Identification andStatus of Employment–This includes your name, date of birth, your spouse’s name, Social Security Number and previous & current employers. It may also include your home ownership status along with house addresses both current and previous.
Record of Past Payments–Your payment history with different creditors such as banks, , credit card companies, and other lenders are recorded in this section. For each account, the details are gathered to track if you consistently make payments or not.
Inquires – This section shows the creditors and businesses that requested your credit history over the past years. The purpose of requesting your credit history may be to check your financial background for possible employment by the businesses and for extending credits by the creditors.
Public recordsrelated to Finance – Certain public events related to your finances from Federal, state and county courts may get recorded in your credit reports. These records may comprise foreclosures,, tax liens bankruptcies, and judgments.Can you check your credit report?
By law, it is a yes! You are entitled to a free copy of your credit report each year from each of the agencies. This is a must to be aware of the fact that all you do financially gets accumulated in your report. But it is also imperative to get an eye on your credit report and assure that every detail is right. It is not necessary that all agencies will have the same information on your payments and credits. They may have recorded information differently or incorrectly. And, if you really find so, all agencies have the process to deal with it.