A credit report is a detailed analysis of your credit history that is prepared by credit bureaus. It is used in determining your credit worthiness when applying for loans of any nature from lenders. The report is of major significance and must be constantly checked and verified for accuracy. Information in the report shows your personal credit scores and is vital in assessing the general outlook of your financial health. As such, your ability to secure loans and credit from lenders depends on the information contained in the report. The data contained therein remains relevant for seven to ten years. Hence, it is imperative that the data recorded be a true and up to date representation of your overall financial standing.
Individuals who are particularly interested in securing mortgages must pay close attention to their credit report. A poor credit score as reflected by the report can damage your chances of getting favorable terms for mortgages. Lenders typically view credit scores as a representation of your ability to make mortgage payments. Hence, the lower your credit scores, the higher the interest rate you are likely to be charged for mortgages. An extremely low score will render you sub-prime making it almost impossible to secure mortgage from most lenders. Therefore, it is essential for your report to be flawless or on the high side, so as to get the best refinance offers. Ensure that any errors in your report are corrected forthwith to prevent future inconveniences.
The information on your credit report is also used in evaluating applications for other loans and financial services. These include credit cards, personal loans, cell phone services, internet connection, apartment rentals, insurance and even employment. As such, the overall outlook of your report can have wide implications on your financial life. On the other hand, ignoring the content on your report can limit your financial options and make it difficult to obtain lucrative interest rates on home refinance as well as other credit.
Currently, there are three major credit reporting bureaus in the US, Experian, Equifax and TransUnion. The three agencies are mandated to compile, update and maintain credit reports for all active credit account holders. Thus, you can obtain your credit report for free from these institutions by making a formal inquiry directly or online.
A typical report normally contains your personal information, account information, mortgage information, account history, judgments, liens and bankruptcy information. There is a space at the bottom of the report that allows you to comment or outline any discrepancies.
A credit report is a definitive compilation of your credit based accounts. It is an invaluable document that is used by lenders to calculate credit scores and determine your credit worthiness. You must constantly monitor the report and rectify any errors and inaccurate entries. This will save you substantial amounts of money in interest rate payments and might help to alert you of identity theft or unauthorized usage of your credit card.