7 Things to Know about Credit Report and Credit Score!
Credit score' and credit history' are two terms that you come across almost every other day
. The lending industry uses credit histories and credit scores to determine your ability for obtaining future credits. Whether it is a credit card, loan or a mortgage, having a positive credit history is the primary aim for every borrower. They serve as important factors in determining your financial state. However before you think of getting into a debt consolidation or
debt settlement program there are a few things you should remember. These will help you to have a better understanding of credit report and credit scores. These are:
Lenders check the credit histories: The art of lending is not all that simple. Lenders before lending money, check the consumer's credit history. The credit history provides a record of your bill payments and due debts. The record helps them to analyze your capability to pay your bills on time. The credit history also determines the credit available to you under specific terms and conditions.
Credit is an important factor for consumers: The lenders check the past usage of credit of consumers to determine their ability to pay. But the consumers should be careful about the usage of credit as the process of lending is based on the past credit reports. When you apply for credit (like credit card, car loan, personal loan or a mortgage), lenders will be eager to know the risks associated with it. For example, whether you will be able to pay back on time or not? Thus having a good credit report actually helps.
Borrowing behavior is tracked by the Bureaus: The major credit bureaus namely Experian, Equifax and TransUnion keep records of your previous interactions. Your past behavior while taking a loan is kept for reference. Whether you paid back on time, the list of people you still owe money and the total debt you have are all taken under consideration. The information is acquired from public records and companies who deal with the consumer. The credit reporting agency with whom the consumer has applied for credit also helps in tracking down your behavior.
Diversified information is found in credit reports: A consumer's credit report generally contains four types of data on the borrower. They are:
1. Identifying information (including name, address, phone number, Social Security number, date of birth and spouse's name),
2. Account history (individual account information such as the date opened, credit limit or loan amount, balance, monthly payment, payment status and payment history),
3. Data from public records (such as federal bankruptcy records, tax liens, monetary judgments and overdue child support payments)
4. Record of inquiries into your credit history.
Remove any errors from your credit report: Your credit report may sometimes contain some incorrect information. In order to get a better credit report it is necessary that you look into these errors and get them removed. You need to contact both the credit bureau and the creditor if you want to fix the inaccurate information. The mistakes can hurt your ability to borrow money later as such it is better to fix them beforehand.
FICO score is the widely prevalent credit score determinant: Fair Isaac's score is the most widely-used credit score determining formula. It is used to convert a consumer's credit history into a three-digit number ranging from 300 to 850. The higher the number, the less is the associated risk. The scores do not mention any specific comments on a good' or 'bad' customer". There is also no cut off score that is followed as a rule. However most of the times the lenders make their lending decision based on the FICO scores.
Credit history can be free, but credit score comes for a price: Fair Credit Reporting Act laws state that the consumers can get a free copy of the credit report once every 12 months from the bureau. Consumers can also request a free credit report from AnnualCreditReport.com. However if you want to view your credit score you need to purchase one at myFICO.com.
Apart from banks and credit card issuers, service providers and employers also consider your credit report. They utilize the information to assess applications for credit, services and employment. The impact of credit history is a bit more than just applications for credit. It is of primary importance when you apply for a cell phone plan or make a job application. As such it is important to know the importance of credit history and credit score before you get into any dealings. It is just not a mere scoring process. It is the ultimate factor depending upon which you will/will not be applicable for credit in the future.
7 Things to Know about Credit Report and Credit Score!
By: B G
Bad Credit Money Loans- Get Required Money Within An Hour Long Term Bad Credit Loans - Getting Assistance Is Possible! Bad Credit Unsecured Loans Very Common Among Individuals Unsecured Loans For Bad Credit - Improve Your Credit Rating! Money until payday – Get Loans For People With Bad Credit Without Any hassle Payday Loans No Credit Check- A Sensible Solution For All Your Needs Bad Credit Loans: Lifeline for people having poor credit status Same day loans no credit check: immediate monetary relief Debt Relief - Debt Consolidation to Handle Credit Card Dues Payday Loans No Credit Check Support For Critical Needs Car Credit No Credit Check - Get Possession Over Your Dream Car Getting Debt Relief - Bad Credit Debt Consolidation Advice Credit Card Debt Consolidation: The Solution For You?