Secrets Of Credit - Part 4

Lots of people have been denied loans, credit cards, or other forms of credit because of inaccurate information lenders find on their credit report. Before a bank (or any other financial institution) grants your application for a loan they will want to find out about your credit history by requesting a copy of your credit report.

As we have already covered, your credit report is a compilation of your credit history, past financial transactions, and your personal information. This report is usually compiled by one of three accredited agencies known commonly as credit reporting agencies. In the United States there are three major credit bureaus, Experian, Equifax, and TransUnion. 

Credit reporting agencies are corporations that help credit card companies, loan companies, banks, and department stores ascertain the credit worthiness of their customers. The credit reporting agency will provide the lending companies all your information so that the lender can see who is a good credit risk and who is not.

The credit reporting agencies receive most of their information from loan companies, credit card companies, banks, and other lending sources. In the report to the credit reporting agency will be information such as your occupation, place of employment, residence records, judgement and arrest records, income status, plus the details on any payments (past and present).

Once the reporting agencies have all the detailed information from the lending sources, they give that information out to any organization in need of a credit score (when it is requested of course). They keep information on file concerning you and your credit, but they don’t make any final judgments as to your credit worthiness. The decision of whether or not you receive credit is up to the credit card company or lender you are dealing with.

This "credit score" is used by banks, credit card companies, and other financial companies to determine your credit worthiness. Most lenders often based their credit limits and rates on information in your credit report. Some employers often consider information on your credit report before they employ you as well. If you have severe financial problems, some will find it difficult to employ you.

Whenever you apply for new credit card, loan, or other form of credit, lenders will base their acceptance or rejection of your application on your personal credit report. If your credit report shows you’ve been reliable in the past, then you will most likely get the credit card or loan you are applying for.

However, if you have defaulted on a particular account, or you were constantly late in making payments, it will most likely get your application denied.

When compiling your report, the agency itself or a financial institution that’s giving them the information may make a mistake and give inaccurate information about you or your credit. If you do not dispute this error and demand the necessary changes, then the error will get left on your report. You can imagine the possible effects that inaccurate information can have in the future. Because of this very fact, it’s vitally important that you check your reports at least once a year.

In order to check your report for any possible inaccurate information, you have to request a copy of your credit report. You can get a free copy of this report from each credit bureau because it’s your credit file and you have the right to know what is in your report. Free credit reports can be found at anuualcreditreport.com.