A credit report is a data file that records credit related activities. Whenever you apply for any type of credit, their system will generate a new record, which will offer the company that checks on your credit, the following information:

Where you have applied for credit

If you have been approved or turned down for credit

Credit score

Date each credit account was opened

Closed credit accounts

Late payments

Payment history

Your current and past home address

Your current and past employer

This information will also include details about your rental or mortgage payment history.

You would generally have one report from 3 different credit-reporting bureaus. Each report would be basically the same. They're maybe a few accounts that are not on one or more of your credit reports. The reason why this happens is because when you apply for credit, the average company would send your information to one of the major credit bureaus. The new information may get picked up by the other credit reporting bureaus.

Your Credit Score

Your credit score is used to get an idea of your past payment habits. If you have paid all of your creditor's on time, you would generally be seen as a good credit risk, on the other hand, you would be rated as a bad credit risk, if you were to have a number of late payments on your credit report. You would be rated as a poor credit risk if you have one or more unpaid closed accounts on your record.

Your credit score is the number that is used to rate the overall condition of your credit report. This saves time for the company that wants to quickly see if you have the type of credit rating that they are looking for. For example, some companies will not accept applicants that have a credit score that is below 600.

In this case there is no reason for the company to invest time trying to read an individuals credit report when they already know that their credit report has a low rating.

Higher scores usually mean lower interest rates on new loans, which could save you money.

Who checks your credit report?

Any company that has an account with the credit bureau can look at your credit report. This would normally happen when you go to finance a car, rent a apartment, apply for a job, apply for a credit card, apply for a home or cellular phone and more. Every time you apply for any service that is connected to credit, the lender company will need to order a copy of your credit report. The lenders have to pay a fee for each credit report that they ordered.

Why would the employer do a credit check?

Many employers will check a person's credit before they would offer them a job. The employer feels that you maybe a poor employee if your credit report shows that you can not pay your bills on time, and if you are handling money, you maybe willing to steal from them to pay your overdue bills. Some employers will not hire a person that has bad credit.

Back to how to ordering your free credit report!

If you have been turned down for credit over the last 12 months, you can write to the credit reporting bureau to get a free copy of your credit report.