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What Does Your Credit Report Says About You?
By plrprousers | October 2, 2008
You almost certainly know all too well that the information which is contained in your personal credit report is used by the loan and credit card companies when deciding whether to extend credit to you, but are you aware of exactly what is actually in your personal credit report? For instance, did you know that the details contained in your personal credit report could influence whether or not you can purchase a new house or are going to need to stay in your current ‘shoebox’?
Many people think that if a lender looks at your credit report that company is just looking at your credit score and, while this is certainly one thing that they do look at, they are looking at far more. Above all, lenders are looking to see the amount of debt you have in comparison to to your income and even quite small accounts, such as those with a mail order catalogue company, will be treated as an income deduction when when it comes to considering a request for a loan.
If a credit crd company, bank or other lender sees that you have got more money going out than you have coming in then your request will automatically be turned down. In fact, by law a certain percentage of your income must be available to meet the payments on a loan before the lender can approve it, whatever the reason for the loan.
Lenders are also looking back at your credit history over the past seven years to see how well you have managed loans in existence during that period. In particular, they are looking at whether you have made payments on time and will play close attention to any payments that you made more than thirty days late. It might not have seemed particularly important to you at the time that you ran into a few problems and were late with your payments for several months on an account, but any lender will certainly take this into account when determining the risk of lending to you now.
A lender will also see whether any of your accounts have run into debt during the last seven years and whether or not these debts have now been cleared. If you have outstanding payments on an existing agreement credit card companies and other lenders will be very wary when it comes to giving you further credit before these are cleared.
Finally, your personal credit report will also show if you have filed for personal bankruptcy, generally within the last ten years. Some people think that a company is much more likely to advance you credit if you have filed for bankruptcy as they enjoy the added protection of knowing that you may not file again for several years. However, this is not the case and filing for bankruptcy is seen by lenders as a red warning flag showing that you have already demonstrated a tendency to get yourself in over your head when handling your finances.
Your credit report is an important document which you should not only understand but which you should review from time to time for your own protection. Fortunately, the law requires that you be given a copy of your credit report once every year upon request and the first thing you should acquaint yourself with is how to obtain your free annual credit report. Having obtained your report you then have to study it carefully to make sure that it is accurate and to ask for it to be amended if it is not. Additionally, there are some instances in which you can request alterations to your personal credit report, even when it is accurate, and here you will have to have the answers to hand for questions like how can I remove a judgment form my credit report?
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