Thursday, September 24, 2009

Credit Report � What Is It And Why It Is Needed?

So what is a credit report? Why are most of the banks, car dealerships, rental places, and many other places that deal with finances using it? When you are buying a car, the dealership will check your credit report before they can provide financing to you. You cannot buy a house without providing information from your credit report. Even getting a credit card completely depends on your credit report score. It is so important to your financial stability and your life in general. And the more you know about your credit report, the better are your chances to get a loan, buy a better car, purchase a house, etc.

Credit report is your personal financial history file. It contains information about all your previous and current borrowings, debt repayments, credit cards, financed cars and houses, payments and many other financial activity. However, your credit report also stores all the negative information about your credit and credit history. For example, if you had a bankruptcy or your credit card company sent your debt for collection to the collection agency, your credit report will record this information and provide it to your future creditors.

Your credit report will also include a credit score � an overall score of your financial position. Your credit score will either increase or decrease over time depending on your credit report activity. For example, if you had a negative activity reported (like a missed payment, collection, etc.), your credit score will decline. If, on the other hand, you had only positive activity on your credit report showing that you are repaying your debt without any missed payments or delays, you credit score will increase. All this information will be available upon the request of your creditors or other interested parties.

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