How important is your credit report
A credit report is very important if you want to have access to all of the credit available to you. From purchasing a car to landing that coveted job, your credit says volumes. Years ago, people used to go to the store for credit and the storeowner would write their purchase on a piece of paper or in a log book until they paid off the balance.
These days, every thing is computerized, and most financial
institutions and employers rely on this computerized data to give credit to
individuals who have credit worthiness. With access to a
credit report, individuals are able to check to see what companies are reporting
and if there are errors they can fix them before
applying for a loan or looking
for a job.
How you pay your bills determines how good your credit report
looks. A FICO score is usually what creditors look at first before giving credit
to an individual. If you have a score above 680, that is considered good. A FICO
score below 680 means that you will have to provide more documentation to the
financial institution before they grant you the loan.
What is in your credit history?
Your credit history comprises of mortgage balances that you owe, student
loans and other financial obligations and how you pay them. You will also be
able to see how much credit was issued to you, all your closed accounts, and
what your monthly payments are. If you have too many outstanding balances, this
can jeopardize the opportunity to get new credit.
The financial institution would look at these balances on your credit report,
how you pay them and your current income to determine whether they should give
you more credit or not.
Tax liens, mechanical liens, medical bills, court judgments, bankruptcies,
and foreclosures are some of things that stay in your credit history until they
are dissolved or paid.
What is not in your credit history?
Some of the things that you wont find on a credit report are:
1. Your bank balance
2. Your religion
3. Your Race
4. Any criminal record
5. Your health
6. Your driving record
7. Your income
These seven items listed above are kept private from being reported to credit
agencies. Medical bills, however, have to be reported because they do relate to
how you pay your bills.
Businesses are also subject to credit reporting. Their credit report is
usually the same except for the inquiries. Inquiries are listed according to
what other companies that business is conducted with.
Important things to remember:
1. A credit report shows balances and monthly payments
2. A financial institution or employer value the credit information available
3. Your bank balance and health issues are not listed
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