What Is A Credit Report and Why Does It Matter
We have already mentioned this concept before. Although you now what it is and how important it is, you have probably never seen your own report.
Although this report has a significant impact on virtually every aspect of our financial status, most of us do not even know what the FICO or credit scores are.
Having a clear picture about your credit report will help you make wise financial decisions and understand why lenders might reject your request of credit. Know your credit, get your free credit report without a credit card every year with new credit card laws.
What Is A Credit Report?
The credit report contains basically all relevant data about your personal and financial life. Personal information includes your legal name and date of birth, your earlier and present address, your social security number, and current, as well as previous employment details. This information is collected form previous credit applications you complete throughout your life.
Financial information includes aspects of your past and present financial history. It contains data about possible loans, the credit cards you own and their credit limits, your monthly bills, and the names of those people who may be entitled for payment on these accounts.
And don’t forget, any public details about your financial state will be also be included in your record. So, be aware of the fact that all verdicts, tax liens, economic failure, late payments etc. will soon be included in your record.
All applications you make in relation to a credit, card, or anything requiring a copy of the credit report itself, will also show up in your record.
What Is My Credit Score and Why Is It Important?
The credit score is calculated on the basis of the information revealed by your credit report.
The result of this equation is called the FICO Score (named after Fair, Isaac, and Company, the group that first developed this scoring system). This score plays a crucial importance in your financial life as lenders determine your reliability using it. Actually to have a FICO score you need to have at least one open account for no less than six months.
Anything about your financial history might have an impact on your score. Unpaid debts, constant late payments on monthly bills, and any negative judgment about you will influence your final score. This in turn will affect your chances of receiving a loan and will be used to determine the interest rate that will be set for your credit. The better (higher) your credit score, the better (lower) your interest rate.
To sum up, you really need to understand what lies behind your credit score if you plan to get any kind of credit or loan, and even, in some cases, to rent a house or get a job. Therefore, take time to carefully examine your record to avoid the presence of any errors that could negatively influence your financial life.
Getting Your Free Credit Report Without A Credit Card
A new law added to the The Fair Credit Reporting Act (FCRA) says each of the nationwide consumer credit reporting agencies – Equifax, Experian, and TransUnion – must provide you with a free credit report without a credit card, upon your request, once every 12 months. You do have to make the request however; but the Federal Government has made that exceptionally easy. Just visit AnnualCreditReport.com each year to request your annual free credit reports.
Learn more about credit cards and your credit score with these related articles:
All about Credit Cards … a series of articles on choosing credit cards, how to evaluate them and where to get them, quickly and easily!
Your Credit … your ratings, scores and protecting your credit.
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