Credit Report

A credit report, alternatively known as credit history, is an important determinant of a consumer's financial credibility. The document consists of a person or company's borrowing and payment history. Each credit report is given a credit score to evaluate a consumer's credit history. The credit score gives an overall idea of the consumer's credit worthiness. The credit scores are reported in the range of 300 to 900. If you are someone who pays your bills on time, and has maintained an appropriate credit history, your credit report will have a favorable score. If you have had some troubles with credit, or have not been able to maintain your credit obligations, your credit score will be unfavorable. Hence your credit report and score play important roles in many aspects of your financial standing.

Companies/Industries

Credit reports are prepared by credit bureaus. There are several, widely recognized credit reporting bureaus that you can approach to check your credit report. A popular company to obtain a copy of your free credit reports is Credit Reports and Scores.

How it Works

Major credit reporting institutions keep track of all of your credit activity in your credit report. When you want to apply for anything that has to do with credit, your credit report is first checked to determine whether you are eligible for it. If you wish to buy something on credit, the seller or lender will access your credit report to take a look at your credit score and determine if you have paid all your bills, and in timely fashion. For large purchases such as vehicles and homes, you usually must have a credit score that is more than 700 to qualify for credit.

Some Factors to How Your Credit Rating is Determined
Your payment history - A record of your delinquent payments
Stability - If you've stayed with a job for a certain amount of years or have stayed in the same home for years, these are good signs of stability and responsibility.
Utilization - If your other accounts/loans are close to their balance limits, this is perceived as a negative to your credit score.

Information that Make Up Your Credit Report
Personal Information - Name, address (current and previous), telephone number, birth date, social security number. On some reports, your spouse's name could be included.
Credit History
Public Records -Any information that could indicate your credit worthiness, such as bankruptcies.
Report Inquiries - A list of all credit granters who've requested or viewed a copy of your credit report.
Dispute Statements - If you've disputed any claims to your credit report, it is listed here. Both the customer and the creditor can make statements on this.

Benefits

The benefit of having a credit score speaks for itself. If your credit is good, you will have no problems when you want to opt for a loan. However, if your credit is poor, you will be turned down and you will have to find some other means of financing your purchases. The report determines a person's "credit worthiness," which is that person's willingness to repay a debt. Not only do lenders look at whether or not a person repays a debt, but they want to see that the person has made timely payments and if they were on schedule. So if you're looking to apply for a new loan, it's very important that you pay your current debts on time.

Cost/Pricing

When you request for your credit report, each of the nationwide consumer reporting companies is required to provide you with a free copy of it once every 12-months. These companies will charge a nominal fee for additional copies. You can also order online credit reports. Some institutions even offer credit monitoring services that monitor your credit report for changes. The cost for these services varies greatly depending upon the types of service being provided.

Timing

Choosing to have a good credit report is not a time-sensitive decision. The best time to start building a healthy credit report is when you require a solid credit history. You can also start building a good credit report when you begin making financial decisions for yourself and are ready to be financially accountable for your credit card or other loans.