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Checking Your Credit Report
Reasons to Check Your Credit Report
Credit information - an individual's financial history - is an integral part of modem life. Although most often used when a consumer applies for a loan, credit reports can also be important when an individual applies for life, auto or home insurance, rents an apartment or applies for ajob1. Many fmancial advisors recommend that a consumer's credit report be reviewed at least once a year, to be sure that all information contained in the report is accurate and complete.
Information Found in a Credit Report
Credit reporting agencies, commonly known as credit bureaus, collect information on individuals from a variety of sources. Much of the data comes from a credit bureau's business subscribers, such as banks and other lenders. Other information is obtained from public records. A credit report does not include any statement about whether or not an individual is a good or a poor lending risk. A credit bureau's subscribers (lenders) evaluate the information in the report using their own criteria and then make a determination as to the creditworthiness of a loan applicant.
A typical credit report usually has the following information.
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Personal data: Identifying information such as name, Social Security number, birth
date, current address and marital status. -
Credit history: Including a list of current and past creditors, credit terms and limits,
and a how well (or poorly) past debts have been repaid. -
Inquiries: A list of requests for credit reports on the individual concerned.
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Public records: Information such as bankruptcies or lawsuits.
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Personal statement: A limited statement where a consumer can explain his or her
position in any dispute with a lender.
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1 Federal law prohibits an employer or prospective employer
from checking credit records without written permission from the individual
involved.
