Credit Report Basics - Part 1

What is your Credit Report?
Why is it so important?


These are a couple of the numerous questions commonly asked about Credit Reports. With the importance of Credit Reports in today's financial dealings it is imperative that a person knows the answers to the questions posed above.

So what is your Credit Report? Simply put, your Credit Report is a report card of your financial standing. If you have never actually seen your credit report you might be in for a bit of a shock at the amount of detailed information they have about you. Some of the things you may expect on your credit report include full, legal name, social security number, address, phone number and date of birth. The things that you may not expect and often come as suprise to many are things like former addresses and telephone numbers (Even if they were/are unlisted), aliases and the biggest shocker, past employment.

Many people may wonder why past employment information is important. Credit issuers want to know that you, as someone they may potentially give a line of credit or loan to has a stable source of income and the ability to pay their balance/loan off. Credit issuers also take into account factors such as periods of unemployment between jobs, frequent job changes and the biggie, length of employment. People are constantly turned down for credit because they have just started a new job; all of these factors coupled with little or no credit history often leads to being denied for a line of credit/loan.

The most important information your credit report contains is your credit account information. Your credit report includes all of your open credit accounts, revolving lines of credit, loans and any other items that use or report to your credit report. Your credit report shows detailed information about each account, line of credit or loan that you have. It shows the type of account an item is, whether it is open or not, whether you are in good standing, late payments, credit limit and other important information. It is extremely important that you verify this information from time to time to ensure its accuracy.

Your credit report is extremely important, as it is what all financial institutions use to make a decision on whether to approve or deny a person for a line of credit or loan. A Credit Report is also used to determine the amount of credit to be given upon approval, for instance, your limit on a credit card. Finally, your credit report is also used to determine the interest rate or APR on a line of credit or loan.

Credit report is indeed important to get a loan because the loan provider will look into the report before offering the credit and based on the report, he will determine your creditworthiness. So it is very important to get a copy of your credit report. If you want to know what information is available in a credit report, you can visit this page.