Credit Report
The term “credit report” refers to the outline on your credit history. It is normally made by a credit buro. They gather all the information anyhow connected with your financial wealth and present it to banks and other lenders. It helps them to decide the amount of money they can lend to you.
Credit Report explained
Creditworthiness assessment helps to select profitable clients for the bank and screen out unprofitable ones from the financial point of view. Different tools are used to assess solvency: credit rating and report, questionnaires, scoring, checking employer information, open and closed databases.
There are three major bureaus that prepare credit reports. These are Equifax, Experian, and TransUnion. As stated above, these entities collect information that might help with assessing creditworthiness. Usually the information they get is almost identical, however, results of their reports quite often have differences.
The gathered information contains history of your working places, Social Security number and other personal details. In the credit report you can also see a credit history abstract that depicts bank accounts, credit cards and previously given credit limits.
Credit reports also include credit inquiries and information about accounts turned over to credit agencies, such as information about liens. Negative information is usually saved in the credit report for about seven years, while information on bankruptcy is saved for 10 years.
A credit report is information that contains information about an individual's credit history from the beginning of your credit history to the present.
It tells you when and how many loans you've taken out, how well you've paid them off, and what your credit score is.
In addition, your credit score shows how much of your official income is being used to pay your loans.
You'll need a credit report if you are planning a large loan and want to be sure the bank will approve your loan in advance. Or, for example, if your credit history is bad, you will be able to see your current rating level and update the information to monitor the score.
Credit Report content
There are four main types of information that the credit report consists of. These are:
- personal information;
- accounts;
- public records;
- credit inquiries.
Personal information. As we have stated above, personal information represents facts about your name, place of living, number of Social Security, etc.
Accounts. This section includes data about all of your accounts whether they are credit or debit. It also provides a glimpse of loans (personal, auto, mortgage, etc.).
Public records. It consists of documentation on financial operations like declaration of bankruptcy and tax liens.
Credit inquiries. Last section of the credit report allows to assess where else the borrower is trying to get loans or credits, information about the status of those loans, applications, and get information about the reasons for denying loans (credits) to that client at other lending institutions.
When applying for credit, insurance or any other loan, creditors are entitled to get legal access to your credit report. Normally they pay for a credit report to the credit bureaus.
