My Credit Detail

Many people seem to have absolutely no idea what a credit report is and how it can actually benefit them. Well here we try to answer the question, “What is a credit report?” and take a look at exactly how a credit report can help you.

So firstly, to answer the question, a credit report is a report that details your credit history that can be used by companies that are considering extending you goods or services on credit, such as loans, credit cards or even phone contracts.

There are three companies that compile credit reports - Equifax, Experian, and TransUnion and each of them uses a variety of different sources to get an understanding of your credit history. Therefore each of the companies may actually have a different report for the one person. Get Equifax Score Watch Now!

Any company that is considering offering you a credit based service can contact Equifax, Experian, and TransUnion to get a copy of your credit report history and make an assessment of whether you are a good credit risk or not.

From that information they can then decide to not offer you that service or increase the price if your credit history is poor.

So what exactly does that mean for you?

Basically, it means that the better your credit report, the more likely you will be able to use credit based services and the cheaper those services will be.

As you can imagine, when it comes time for a significant investment such as a mortgage, it can be pretty important to have an accurate and good credit history as this can end up saving you thousands of dollars in repayments. Even on smaller loans, the savings in repayments can be quite significant.

It is very important then, to maintain a good credit history as well as making sure that your good repayment history is reflected accurately on your credit report.

The first thing you should do is to order a copy of your free annual credit report from Equifax, Experian, and TransUnion in order to look at it and go over your credit items to make sure they are accurate and fair.

While sometimes these companies make mistakes in reporting which can negatively affect you, the good news is that you can challenge any incorrect or misleading items on your credit report in order to repair your rating.

An easier way to do that is to hire the services of a credit repair and monitoring company who will do it on your behalf.

Most people would profess a vague familiarization with the terms credit score, credit rating and credit report and they would have an inkling about why the need to aware of them. But that’s a long way off from knowing how important they are in daily life. For example, the credit score is used to determine interest rates for a wide type of financial necessities ranging from car loans to home loans to mortgages, home as well as automotive insurances, to decide whether a consumer qualifies for a loan and the subsequent interest rate at which he will be charged, whether he qualifies for a new cell phone offer, whether utility deposits need to be imposed on him and in far-reaching instances whether he is eligible to be allowed to rent an apartment or to be offered a job.

For all these reasons and such, it is very important that consumers frequently check the accuracy and completeness of their credit reports and be aware of any outstanding credit score issues. The credit report is a file which contains a variety of personal information like address, income, past payment history of credit balance and debts and other potential aberrant information like past criminal convictions and filings of bankruptcy.

When businesses need to look into someone’s credit history or report, e.g. to check if he can be considered eligible for a mobile phone plan, they request consumer information from the three major reporting agencies which are Experian, TransUnion and Equifax. The Fair Credit Reporting Act lays down the framework that governs the transfer and modification of such information. The agencies mentioned before collate the information gathered from a multitude of sources and hence the credit information reported by them might often differ. Sometimes they might involve errors and this would negatively impact credit rating.

To prevent that, it is recommended that the reports which are provided by all 3 agencies, free of cost and once a year, be checked meticulously by the consumers for completeness and accuracy. On related lines, if an applicant is denied loan or insurance, the same governing Federal law framework ensures that a credit report would be provided free of cost, across a range of qualifying conditions, e.g being denied of credit, or on welfare, or being a victim of identity fraud, or being unemployed and going to look for a job in the next 60 days.

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If one is entitled to such a free credit report by fulfilling those conditions, he should contact the Reporting Agencies individually and instead go to AnnualCreditReport.com and get the details of the authorized service where he should make his request. While looking into the Credit Report, the FICO score is a compressed, summary index that provides an idea of the relative perception that credit issuers will have of the consumer and hence the higher it is, the better. Usually it is bounded by the ranges 350 and 850.

There are recommended strategies which give an insight into how the credit-score calculation works and provides common-sense and time-tested ways of getting a good credit rating. For example, simply getting the issuer to delete one late payment as an act of goodwill or a long-term plan of paying credit bills regularly dramatically helps credit score. Lastly, a number of credit repair agencies offer a fast reversal of credit blemishes which are mostly tapping into the desperation of tarnished consumers. They do not offer any value and are mostly scams.