What Does Your Credit Report Mean to You

When you are applying for a mortgage loan, a car loan, or a credit card, you will have your credit report checked by a lender. All the info in your credit report will have a strong impact on your chances to get a credit and your creditworthiness for a lender. It is really a usual thing for an employer or a landlord to look into your credit report. Your credit report has an effect on many areas of your life and it is essential to know what it consists of. You may apply for a free copy of your credit report in one of the three major credit bureaus: Experian, Equifax, and TransUnion.

You have a right to request one free report per year from each of them. Your credit report includes a summary of your payment history, your available credit, and your monthly debts. Your credit report also has personal information, like your address, employment history, Social Security Number. Your credit report contains the info on the accounts you have ever opened, like merchant plastics, consumer credit cards, car and mortgage loans, and any other credit issuers who have granted you a credit in the past. There are also public records in your report, like tax liens and bankruptcy cases.

Such drawbacks in your credit report as late payments, credit defaults, and too many applications for a new credit will get your credit score down and affect you in future when you will try to get a credit. In most cases, the negative info will stay for seven years in your credit report after the last date of activity on the account.

A bankruptcy will stay on your credit report from 7 to 11 years. To improve your credit report, you should make all the payments on time, never use all the available credit, and avoid applying for numerous new credits.

No credit card company, bank, retail store, or other lender will grant you a credit product without looking at your credit score, and the average person has no idea about their score and what it means. Rather often, credit issuers don't make it really clear that your credit history is being reviewed when you respond to the credit card offer. No one will even tell you that you are showing an official inquiry which will count against your score no matter if you are approved or rejected.

Most consumers don't even know that the good credit card gets their score down even if they pay on time each month. Many have no idea that one late payment on one plastic will cause the low APR to go up not only on that particular plastic, but on other cards that have balance.

The truth is that you should read the fine print very carefully and always get educated on using credit. Knowledge is power and your financial affairs depend mostly on your credit report.