Ever hear the phrase "Credit Report"? You most likely have, for example if you've rented an apartment the landlord often wants to check your credit report. What's in the credit report? What does it mean? How can you see yours? And why would you want to see your credit report?
The reason to want to see your credit report is simple; the information in your credit report is used in numerous decisions made by companies you do business with. If your credit report looks bad, that's all the companies care about, and they'll deny you credit cards, give you high interest rates, refuse to let you rent an apartment, and more. Especially alarming would be if there is false information on your credit report, information that might even refer to another person entirely, and this false information makes your credit report look worse than it actually is.
There are three major credit reporting agencies:
You can order your credit reports directly from each of the above three sites, or there are any number of companies through which you can order a consolidated credit report that is perhaps easier to read.
The contents of these credit reports include the following
- A list of current and former residence addresses
- A list of current and former employers
- A list of bank accounts, and account usage data
- A list of credit accounts, and account usage data. Of interest for the credit accounts is that it shows any late payments, missed payments, and deliquencies.
It's helpful to realize that what a prospective lender is looking for is first the likelihood that you will pay for the loan at all, and secondly the likelihood that you will be difficult to deal with. If you have a record of always paying your bills on time, carrying a reasonable amount of debt, then you look like a good credit risk. But if you're frequently late with payment, have had deliquencies, or even worse a bankruptcy, the riskiness of making a loan to you obviously increases.
Once you get your credit reports, and it is a good idea to do this every year or so, go through them carefully. If you find innacuracies, you can contact the reporting agency and get them corrected. Of especial interest is when accounts appear which you know nothing of, maybe someone else is applying for credit in your name. Or maybe it's just a mistake and they filed someone elses account accidently with your information.