Have you ever though to yourself "I wonder what's in my annual credit report?" Well if you're honest with yourself, you probably already know the answer. Your credit score directly reflects how you take responsibility to pay your bills in full and on time. Like spring cleaning, and changing the batteries on your smoke detector, a good habit is to check your report every year.
All About Credit Reports
This information is simply a compilation of data that credit bureaus collect about a person's credit history. In the United States there are three companies that are considered to be major credit bureaus. They receive information from a variety of lenders that you have borrowed money from, such as banks or credit card companies. From this information they produce a document that summarizes this history. It is then sold to people who have an interest in how you handle your money such as new employers, banks, or mortgage lenders.
The actual report lists your current contact information and other vital statistics including your social security number. But the bulk of the information has to do with card purchases or other loans, and how efficiently you pay them back. It lists specific details about each account such as when it was opened, the amount owed, and the credit limit. Those who pay their bills in full and on time typically achieve a higher score.
Why is this Information Important?
A person is given credit when they can prove to a lender that they are able and willing to pay it back. Credit is nothing more than a loan. So when you make a purchase on a credit card, the bank is literally lending you the money until they send you a bill and you pay it back. Details of a person's lending history a vital tool for lenders. After all, would you let someone borrow money from you if they were not going to repay the loan?
A person's financial history is built on the information provided each time they fill out an application for a bank card or a loan. This information is then sent to a credit bureau that tracks how quickly you pay your bills or repay the loan. When you miss a loan payment or are late paying your card, your credit score is affected.
Paying bills on time is the secret to earning an impressive rating. Since old accounts may be tracked for up to eleven years, this is something that must be taken seriously. So pay your bills and one day your eyes will shine when you say, "Wow, is that really my annual credit report?"
All About Credit Reports
This information is simply a compilation of data that credit bureaus collect about a person's credit history. In the United States there are three companies that are considered to be major credit bureaus. They receive information from a variety of lenders that you have borrowed money from, such as banks or credit card companies. From this information they produce a document that summarizes this history. It is then sold to people who have an interest in how you handle your money such as new employers, banks, or mortgage lenders.
The actual report lists your current contact information and other vital statistics including your social security number. But the bulk of the information has to do with card purchases or other loans, and how efficiently you pay them back. It lists specific details about each account such as when it was opened, the amount owed, and the credit limit. Those who pay their bills in full and on time typically achieve a higher score.
Why is this Information Important?
A person is given credit when they can prove to a lender that they are able and willing to pay it back. Credit is nothing more than a loan. So when you make a purchase on a credit card, the bank is literally lending you the money until they send you a bill and you pay it back. Details of a person's lending history a vital tool for lenders. After all, would you let someone borrow money from you if they were not going to repay the loan?
A person's financial history is built on the information provided each time they fill out an application for a bank card or a loan. This information is then sent to a credit bureau that tracks how quickly you pay your bills or repay the loan. When you miss a loan payment or are late paying your card, your credit score is affected.
Paying bills on time is the secret to earning an impressive rating. Since old accounts may be tracked for up to eleven years, this is something that must be taken seriously. So pay your bills and one day your eyes will shine when you say, "Wow, is that really my annual credit report?"
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