Consumer Credit Reports - Facts And Facts

A credit report, or credit file disclosure as it is sometimes referred to

, is simply a detailed account of a person's financial history. It is a very powerful tool when it comes to finance-related matters. At present, reports are kept and provided by the three major credit bureaus in the country namely: Equifax, Experian, and TransUnion.

There are five types of credit reports and each has its own function- consumer reports, property manager reports, business reports, employer reports and mortgage broker reports. The most common among all is the consumer report. These reports record personal financial histories. The property manager reports record rentals and are mainly used by landlords to maintain real estate properties for rent. Business reports usually show a company's details such as number of employees, yearly sales, and payment trends. Business reports are the creditor's main basis for determining whether a particular company is credit worthy. Likewise, employer reports also display similar results, but is only used in addition to consumer credit reports. Mortgage broker reports, on the other hand, are a different type of credit document. The latter is used to decide whether a client is a good risk for granting a mortgage.

Understanding a Credit Report

According to the Fair and Accurate Credit Transactions Act (FACT Act) which was enacted in 2000, people with credit lines are entitled to an annual free credit statement by any of the three major agencies. However, this is not the only way people can obtain a statement. Mail and online requests are also common methods. By taking hold of reports, a person is able to accurately inspect their financial entries.

Checking on the various types of financial statements is an important step in maintaining financial stats and can give an edge to most people. Most significantly, reports contain the credit scores of a person or business. These figures are dependent upon the specific credit history such as payment trends and missed payments if there are any. This rating is a crucial factor especially when vying for personal or business loans. In addition, regularly reviewing credit reports helps a person detect or prevent crimes such as identity theft. Credit-related identity theft occurrences are among the most rampant in the United States and can cause a multitude of damages and costs. For such incidents however, whenever there are inaccurate or suspicious credit entries, credit bureaus and consumer reporting agencies are obliged to investigate upon them.

Credit reports are among the most common yet efficient ways to protect your finances and its flow.

by: Leo Chu

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