With the hustle and bustle of everyday life, consumers normally don’t think about what is reported on their credit reports. Whether they feel they already know the contents of their credit report, or just tuck this little “chore” into the back of their mind for later, or if they are even scared to check, the average consumer does not know his or her credit score and what information is included on his or her credit history.
In case you are unfamiliar with credit reporting, a credit report details all of a person’s financial history, good, bad, or indifferent. Your credit borrowing history and your ability to make payments on time are typical items which appear on your credit report. When you apply for credit is even noted on your credit history. This means if you apply for credit to purchase a car or apply for a credit card, your approval or denial of that credit request will appear on your credit report.
Whenever you attempt to obtain credit, for whatever reason, the company will obtain a copy of your credit history. Even this request for a copy of your credit report will be noted on your credit history! After a review of your credit report, the company will determine if it feels you are a “good” credit risk. If so, the chances are good that your application for credit will be approved. In not, not only will you be denied for credit, but the request for credit will be noted on your credit report and will decrease your credit rating further.
Knowledge of what is contained on your credit report cannot be stressed enough. It is extremely important that you review, understand, and KNOW what is listed on your credit report.
It is really very easy to obtain a copy of your credit report. You can utilize one of the many internet businesses which offer this service or you can go ahead and contact one of the three major credit reporting agencies – TransUnion, Equifax, or Experian – for a copy. These credit reporting agencies are legally required to provide one copy of your credit report, every twelve months, upon your request.
Sit down and review your credit reports once they arrive. You will need to be on the alert for any inaccurate information. Be sure to check current and past addresses, employment history, and payment information. If you previously had accounts which were past due, but subsequently brought back up-to-date, be sure that this is reflected on your credit report.
If you find any inaccurate or false information on your credit report, it can be corrected. A simple letter to the credit reporting agency explaining the purpose of your letter and outlining the information which needs to be corrected, along with proof of your claim, should result in the information being amended.
The importance of a clean credit report cannot be over-stated. Oftentimes, people are so busy with their day-to-day lives that they may forget about an insignificant $20 payment. This missed $20 payment, eight months down the road, when you are trying to refinance your home or purchase a vehicle, can play havoc with your credit application. This is why it is important and necessary to review your credit report regularly.
At the very worst time, the importance of a clean credit report will dawn on you, maybe when you apply for a home loan. If you allow false or inaccurate entries to remain on your credit history, you should be prepared for high annual percentage rates (APRs). Don’t sit by and allow this to become your fate! Always KNOW what is contained on your credit report!
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