Saturday, October 21, 2017

Credit Reports: Why It Is Important To Check Yours

Credit reports, also known as credit histories, are extremely important items, but also ones that are often not regarded as such by consumers. This article looks at why you should keep up with what is being reported on your credit file, and the impact it can have on your future credit applications.

A credit report is essentially a record of an individual’s past borrowing and repayment actions, detailing items such as credit card, personal loan and mortgage payments and applications over the last few years. Every time an individual performs such an action the information is forwarded to one of the national credit bureaus, who then make a note on that person’s credit file.

The report then plays an important part in determining that consumer’s credit worthiness when they next make a credit application. Potential customers are assigned points on their past behavior as listed on the report, and whether their application is accepted or rejected depends on them achieving the score required by that company.

For this reason it is vital that individuals make every effort to maintain good financial practices, and equally as important that they regularly get a copy of their credit reports to check that their good behavior is being noted as it should.

One way of obtaining a copy of your credit report is to utilize the services of one of the many online companies that work in this field. An alternative way is to request a copy yourself from one of the three major credit reporting agencies (Equifax, Experian and Trans Union), who are legally required to provide you with a copy once every 12 months.

The next step is to look at your credit reports and check that all of the information is correct. This includes even seemingly unimportant information such as old addresses and length of time at current address, as even a small discrepancy can have an adverse affect when you next apply for credit.

Any false or inaccurate information can be amended by writing to the relevant credit bureau and enclosing suitable proof. This relates not only to personal information, but also credit information, such as credit cards listed against your name that you no longer own, or have never owned in the first place.

Many people make the mistake of not checking their credit reports, and are then left wondering why they have been turned down for credit when they have not had financial problems in the past. This rejected application then becomes a black mark on their credit file, and means they have even less chance of being accepted for their next application.

By regularly getting copies of your credit reports you can check the information, have it amended where necessary, and avoid the above example happening to you, which can become a vicious circle and see your credit score spiraling downwards as the months and years go by. This is not only frustrating, but can also result in years of high APR products, as you become regarded as a credit risk.

For more about how to repair your credit report or to learn how to improve your credit score visit us.

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