5 Items you’ll
find on Your Credit Report
You’ve applied for a loan at a bank or other
lending institution. You’ve done your research,
filled out all of the required forms and you think you’ve
meet all of their requirements. All you need to the
formal approval. Then you find that your application
has been denied. The reason is commonly a poor or irregular
credit report.
This may leave you wondering: “What is a credit
report and why did it have such an impact on my loan
application?” A credit report is a document that
details your personal financial data and history. These
reports essentially show the reader how you manage your
finances and the information recorded in it can be the
major factor in a bank’s decision to approve your
loan application or deny it.
What type of information does your credit report include?
Here’s a quick overview of some of the information
included on it.
Personal Information
Information in this category includes things like your
full name, social security number, current and previous
addresses and current and past places of employment.
This information is gathered from the information you
have given to past creditors so you’ll want to
ensure that there are no discrepancies.
Public Records
This section of a credit report details things like
bankruptcies and foreclosures as well as any accounts
you might have in collection.
Your Credit History
Anyone reading your report will be able to see the number
and types of accounts you have. They will also be able
to see the payment history for each account and that
includes all late payments.
Credit Inquiries
This section of your credit reports lists anytime you
made an inquiry for new credit. If too many of these
are made in a short period of time, lenders taken a
very negative view of you and your financial management
abilities.
Your Credit Score
After your credit profile is looked at, a number is
assigned that falls between the range of 340 and 850.
The higher the number is the better. The higher your
score, the less of a risk the lender perceives you as.
Your credit report can have a huge impact on your ability
to secure a loan and on the terms that you get when
your application is accepted. A poor credit report will
mean higher interest rates and poorer terms and could
also mean a rejection of your loan application if the
lending institution is not impressed with your credit
history. That’s why it is so important to secure
a copy of your credit report before applying for a loan.
You want to have time to correct any debt management
issues before a lender sees it, not after.
There are several agencies that can help pull your
credit report for you. There are different types of
reports you can receive including one with or without
your current credit score and one that offers a side-by-side
comparison of your standing with all three of the major
credit reporting agencies.
You may find yourself surprised with the results, particularly
if you decide to use more than one company. The problem
may not be with your credit, but with discrepancies
in your report. The information may be out of date or
contain incorrect information, and though an old address
may not seem like a big deal to you, your bank may have
questions and those questions could prolong the loaning
process. Be sure to take a close look at these credit
reports and correct any mistakes as soon as possible
to ensure that was your banks see is an up-to-date and
completely accurate view of your financial history.
You’ll have to make sure that update your information
with each major credit reporting agency because they
work independently of each other and do not share any
sort of information between them.
Any comments made on your report are there for some
time. If the comments are positive then that’s
a good thing, but a negative comment from a past lender
can influence your buying and borrowing power for seven
to ten years if that comment is accurate.
It’s important to remember than any sort of financial
decision you make, influences your financial future.
Take care when managing your debt – your past’s
actions can prevent your future dreams from coming true.
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