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[W445]What Is A Good Credit Report

by Peter Lenkefi, Pet

A credit report is a retelling of your credit payment history. It can be provided to companies by one of the four credit bureaus in the U.S. as designated by law. Usually, this information is only shared when credit is being extended, although this is not always the case.

A credit report is used to tell a potential creditor about your ability to repay your debts, based on past experiences. All credit reports are hosted in databases housed by the credit bureaus.

If you are one of the 210 million people in the U.S who has a student loan, credit card, mortgage or another type of loan, then you probably have a credit file, somewhere. The information gathered to create your credit file is garnered from the companies with which you have credit extended to you. Also, the government or legal system may provide information as well.

Whenever you apply for more credit, a credit report is usually created which contains all of this information from one of the four credit bureaus in the U.S. (Innovex, Experian, Equifax and TransUnion). There are quite a few other, smaller credit bureaus around the states; however, most credit granting agencies will only look at information from one of the big four.

There are several different kinds of credit reports that an agency can request about you:

- Consumer Credit Reports (what we have discussed most of this article already);
- Property Manager Credit Reports: These reports are used by landlords to determine your credit history with regards to your rental payments, and are essentially the same report as the consumer credit report.
- Business Credit Reports: These reports are used by credit agencies to determine if a business is credit worthy. Information gathered can include company background, number of employees, estimated yearly sales, public records, payment trends and how the company compares to others in the same industry.
- Employer Credit Reports: These reports are similar to the consumer credit reports, but are used in addition, and include such information as employment history, education, criminal records checks, and motor vehicle registration and history.
- Mortgage Broker Credit Reports: These credit reports are quite different than the others, as they bring together information from more than one database at a time. These are used to determine if a client is a good credit granting risk for a mortgage, and can include information such as your name, living situation, and employment and educational history.

Credit bureaus collect information about the people who have credit, and then maintain that information for any reports as discussed above. Although credit bureaus are not affiliated with the government, they are strictly regulated to protect the privacy of credit issuers, granters and consumers.

Most of the transactions in your life would involve money. And not all the time will you be able to purchase something with cash in hand. That's where credit takes its place in the picture. Before involving yourself in financial transactions, you need to fully understand how credit and credit reports work.

How does credit work?

Lenders will most likely grant your loan applications if they see that you have good credit. Your credit reflects your image as a borrower. A favorable credit could be achieved when you pay your debts on time. There are different ways by which you can build your credit and other ways too to repair damages as well.

How does credit report work?

The idea of a credit report started when a third party got involved in credit transactions. This party kept a record of all credit information for other lenders to have an idea of how well a borrower can pay his debts. However, the first credit reports weren't really reliable because they only contained negative information.

After some time, developments took over which made credit reports more accurate hence more reliable for lenders and consumers. Today's credit report is made up of the following information:

Personal Identification

Most commonly personal information includes your name, present and previous address, contact numbers, birthday and social security number. If applicable, your spouse's name is included too. Other than these, your credit report will also contain information about your previous and present employers.

Credit History

A credit report won't be a credit report without information about your credit activity. Since this document should be able to tell lenders what kind of borrower you are, it contains your bill-paying history with banks, finance companies and other establishments you do or have done credit transactions with. It includes the type of accounts you have and related information about them. Of course, that would also include delinquencies in payments.

Public Records

Apart from personal information, your credit report will also contain facts about tax liens, court judgments and bankruptcies. These kinds of information will determine your credit worthiness.

Report Inquiries

Included in your credit report is a list of granters and other people you have done transactions with and who have requested for a copy of your credit report. Apart from this, the list of companies who offer you credit is also included in the report. The latter don't necessarily have your credit report but since you qualify for the things they offer, insurances included, they belong to the "pre-approved" credit offers.

Dispute Statements

Finally, a credit report also contains information about the disputes you have previously filed about the report. The credit bureaus would notify both the consumer and the creditors about the disputes filed.

Credit Report versions

Credit report bureaus can release different kinds of credit reports according to who requests for it. Consumers usually have the kind which contains all the information above and different inquiries about the report. On the other hand, the creditors have the report containing the above information and only the inquiries made by companies with a "permissible purpose".

Article Source : Pg. 34

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Both Peter Lenkefi & Tony Francis are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Peter Lenkefi has sinced written about articles on various topics from Accounting Guide, Home and Mobile Phone Reviews. For more more information about please visit. Peter Lenkefi's top article generates over 450000 views. to your Favourites.

Tony Francis has sinced written about articles on various topics from Finances, Free Credit Report Score and Finances. Before you can actually improve credit scores or build good credit, you have to consider what credit reports are. Free-Credit-Reports.com describes what a