Your credit report is a glimpse into your credit history, it holds information about how you handle credit, from your mobile phone bill to your mortgage; everything credit related gets recorded here. It is legal for certain companies to hold this information and to allow other credit companies the potential to see what your credit history is like and how much of a risk you are. It is a way for companies to track how you handle money and responsibility towards debt.
What Is A Credit Report
Your credit report represents you; it holds information such as if you pay your bills on time, how much credit you have access to and how much of that you have spent. It is a way for other companies to assess your spending habits and the risk you pose if they lend you any money.
A credit report can tell a company if:
- You are trustworthy
- If you are reliable
- The amount of credit available to you
- The amount of credit that you have used
- The amount of credit that you can afford
- You are likely to pay the debt back
- If you are responsible towards debt
- If you are a high risk
With this information, they are able to determine the amount of interest they will charge and if they will lend you any more money.
Your Credit Report Accuracy
It is important to check your credit report regularly as it isn’t always accurate; sometimes, the wrong information gets included in your report and it is up to you to get that information removed.
It is a stressful time, because most people only look at their credit report just before they make a big purchase using credit or when rejected for a credit application. My son, who went to apply for a current account and got refused because he hadn’t declared he was bankrupt; the problem was he hadn’t been, this was incorrect, but we had to get a credit report and nothing showed, so it is a mystery as to why this showed up when applying for a current account.
It is possible to get inaccurate information removed but you need time to do this and if you have left it till the last-minute to check, then this can cause a problem if you are in the process of applying for more credit.
Your Credit Report
Your credit report is a key item that companies will use to determine the rate of interest they will charge and the likelihood of accepting your credit application. If you are looking to get the best deal when you apply for credit, then it is important that you protect your credit report by acting responsibly, don’t take out more credit than you can afford to repay.
If you have no credit history then it is difficult to apply for large ticket items; it is important that you build up your credit report over time, especially if you are looking to borrow money in the future. Without this information credit companies could say no, as you have no history with which to judge as to your risk.
Therefore, it is important to look after your credit report; it can affect the amount of money you need to pay back if you ever apply for credit. It shows the good and the bad, so it is possible to repair a poor credit rating but it will take time. Act responsibly, and carefully, when you look into borrowing money, because how you act today with your credit, could affect how much you have to pay back on future credit.