KNOW THE IMPORTANCE OF CREDIT REPORT AND CREDIT SCORE

In this advanced financial era, the credit report plays vital role in deciding of your credit eligibility / interest rates / charges. In other words, it became deciding factor for every debtor. 

Today, we will know the important of credit report and top reasons to have good credit score.

What is credit report?

Your credit report is a compilation of information about the way you handle debt. It includes information about how much debt
you've accumulated, how you pay your credit bills, where you live, where you work, whether you've filed bankruptcy, and whether you've had a home foreclosed or vehicle repossessed or settled. If it sounds like your credit report contains a lot of information, that's because it does.

How Does Information Get On Your Credit Report?

Credit reports are maintained by businesses known as credit bureaus or credit reporting agencies.

In India / other countries, there are four major credit bureaus: TransUnion, Highmark, Equifax and Experian. Banks / Finance Companies that you do business with have agreed to send your debt information to credit bureaus (at least one of them or maybe all four) who then update that information in your credit report. Most of your credit card and loan accounts are updated on your credit report fortnightly.

Some businesses don't update your credit report with your monthly payments, but will notify the credit bureaus when you become seriously delinquent on your payments. For example, your credit card bill isn't automatically included in your credit report, but if you fall due in bill payment, the bill might be listed on your credit report as a overdue debt collection.

What Type of Information is Included In Credit Reports?

Credit reports include basic identifying information like your name, DOB, PAN Card, Other identification card numbers, Contact numbers, mail ids, address, and place of employment.

Misspellings of your name and previous addresses and employers may be listed on your credit report. Sometimes this is because of an error with the business who reported your information. Or, it could be a sign of identity theft.

Your credit report contains detailed information about your credit cards and loans.

For credit cards, your balance, credit limit, account type, account status, and payment history are all included on your credit report. Loan balances, original loan amount, outstandings, date of availed and payment history appear on your credit report.

Public records like bankruptcy, foreclosure, suit-filed, settled are listed in a separate section of your credit report.

Credit reports include a list of businesses that have recently checked your credit history either as a result of an application you made or a promotional screening. These credit checks are known as inquiries. Your version of your credit report will show inquiries from everyone who's pulled your credit report, including businesses who look at your report for promotional purposes. A lender's version of your credit report only shows the inquiries that were made when you put in some type of application. So Be careful with inquiries made on your credit report. Credit score will effect by frequent inquiries also.

You Should Check Your Credit Report:

You should order your credit report at least once a year to make sure the information listed on it is correct. If you suspect you've been a victim of identity theft, you should monitor your credit report more frequently.

You might order your credit report more frequently than that if you're actively trying to repair your credit or if you expect to apply for a major loan soon.

You can order your credit report in a few ways: For free through a website the government set up for that purpose, for free via a promotional offer like bankbazar website, or by purchasing from one of the four credit bureaus.

Why Your Credit Report is Important?

A variety of businesses check your credit report to make decisions about you. Banks check your credit report before approving you for credit cards and loans, including a mortgage or auto loan. Landlords review your credit report to decide whether to rent to you. Some employers check credit reports as part of the application process.

Your credit report affects many parts of your life, so it's important that the information included is accurate and positive.

Your credit report is the sole source of information for your credit score - a number that lenders sometimes use instead of or in addition to your credit report. Credit score is a three-digit number that sort of grades your credit report (most of the credit bureaus calculate the score out of 900). High credit scores show that you have positive information on your credit report while low credit scores indicate the presence of negative information.

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