What Is Your Credit Report?
A Credit Report is a report describing an individual's credit history and his creditworthiness. When an individual or a company files fora loan from a financial institution, a credit report is prepared to check the credit worthiness of the customer. The complete detail of the individual or the company, their address, past history of bank statements, defaults if any, payment history of credit card are all assessed to check the person’s credit worthiness. This is prepared as a report and submitted by the bureau to the lender.
A credit report is akin to an individual’s horoscope. It has all the information about you, from where you live, what you do for a living, your income, expenses, mortgages if any, loans and advances, credit card history and so on. A credit report helps you to access yourself and you are monitored for present payments and latest updates. This will help improve your score to avail better interest rates. There are many websites preparing credit reports and they help in putting across your profile to prospective lenders. They monitor your credit for a month and try to improve your financial well-being. For protection, they verify your identity before providing you a copy of your free credit reports.
If you are a first timer then its best to get a report prepared. This helps in analyzing your borrowing potential. Start with a student loan if possible. This can go a long way in your life. If you have been a part of 529 plans it will establish your credibility. Remember a credit score is based on your past history and not present earnings. The report shows how capable you are in returning your loans without default. Prepare a credit report before you apply for a mortgage. This helps in plugging loopholes if any. This report helps in assessing your borrowing habits and money-managing skills to the lender.
There are many standard formats available for preparing a credit report. What is the method used is unknown to many. It is a mathematical calculation that is used to determine the credibility of an individual or company. This report helps in securing a loan at attractive interest rates. A credit report includes personal details like name, date of birth, current and past addresses, employment and driving license number. Also your past credit applications to your previous provider, amount of credit availed and type of credit (for example home loan) are all included. The report also includes any defaults in your past payments. If payment is not made within 60 days or more then you may have been sent a letter notifying you of the default. Included is a list of payments made against credit defaults and if there is any public record for bankruptcy orders. Your report cannot include information identifying your political, social or religious beliefs or affiliations; criminal and medical record; ethnicity; or sexual preferences.
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