Credit Reports Explained
A credit report contains several details about your financial history.
It is intended to allow agencies such as banks and other lenders to decide whether they should lend you money, how much they should lend you, and how much they should charge you for the privilege.
But what exactly does a credit report contain? Well, first of all, it doesn't contain lots of personal details and opinions as many people think it does.
A credit report is purely factual, but tends to contain a huge amount of information, often going back several years: Personal Information This includes your name, address, Social Security number and so on.
It is used purely so that lenders can be sure that the report they're looking at is for you, and not someone else with the same name.
Public Record Information This includes general financial information such as whether you've ever been declared bankrupt, whether you are paying any child maintenance, and whether you have any other regular liabilities.
Collection Activities If any of your debts have ever been handed to a debt collection agency, they will be listed here.
Typical information includes the size of the debt, the reason for your non-payment, and how the debt was eventually settled.
Credit Information This lists all of your past and existing credit arrangements, such as mortgages, car payments etc.
It includes the amount of the credit, how well you kept up with repayments, and whether the debt belonged solely to you, or whether it was shared with someone else.
Companies Who Have Requested Your Information This lists all the companies who have requested a copy of your credit report.
If they just wanted your details so they could send you a special offer, they will not be listed on credit reports sent to other companies, they'll only be on copies you request.
Your Personal Message This is a purely optional section, but it gives you 100 words to explain any negative points on your report.
This may help to secure a higher level of credit if you can give a valid reason for previous bad credit data.
Your Credit Score This is something you need to request, and it is not technically part of your credit report.
It is simply used to give you a rough indication of how healthy your credit rating is, and will help you to see how you can improve your report.
As you can see, a credit report isn't nearly as scary as many people think.
It is simply a history of the money you've borrowed and how good you've been at paying it back.
It allows agencies to decide whether they trust you enough to lend you money, and can affect things like the amount of money they'll lend you, and the interest rate they'll expect you to pay.
It is intended to allow agencies such as banks and other lenders to decide whether they should lend you money, how much they should lend you, and how much they should charge you for the privilege.
But what exactly does a credit report contain? Well, first of all, it doesn't contain lots of personal details and opinions as many people think it does.
A credit report is purely factual, but tends to contain a huge amount of information, often going back several years: Personal Information This includes your name, address, Social Security number and so on.
It is used purely so that lenders can be sure that the report they're looking at is for you, and not someone else with the same name.
Public Record Information This includes general financial information such as whether you've ever been declared bankrupt, whether you are paying any child maintenance, and whether you have any other regular liabilities.
Collection Activities If any of your debts have ever been handed to a debt collection agency, they will be listed here.
Typical information includes the size of the debt, the reason for your non-payment, and how the debt was eventually settled.
Credit Information This lists all of your past and existing credit arrangements, such as mortgages, car payments etc.
It includes the amount of the credit, how well you kept up with repayments, and whether the debt belonged solely to you, or whether it was shared with someone else.
Companies Who Have Requested Your Information This lists all the companies who have requested a copy of your credit report.
If they just wanted your details so they could send you a special offer, they will not be listed on credit reports sent to other companies, they'll only be on copies you request.
Your Personal Message This is a purely optional section, but it gives you 100 words to explain any negative points on your report.
This may help to secure a higher level of credit if you can give a valid reason for previous bad credit data.
Your Credit Score This is something you need to request, and it is not technically part of your credit report.
It is simply used to give you a rough indication of how healthy your credit rating is, and will help you to see how you can improve your report.
As you can see, a credit report isn't nearly as scary as many people think.
It is simply a history of the money you've borrowed and how good you've been at paying it back.
It allows agencies to decide whether they trust you enough to lend you money, and can affect things like the amount of money they'll lend you, and the interest rate they'll expect you to pay.
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