What is Credit Report?
Many people have heard of the term credit report, but not everyone really knows exactly what it means. A credit report can be looked at as a report card of one’s credit and financial activities. Depending on your payment timeliness and the activity of your credit, a credit report informs you on how you will be graded. If you make your payments on time without them being late and defaulting on your accounts, the higher the grade will be on your report. Having a good credit score has an accumulative affect on your credit report. Being aware of what is on your credit report will help you keep a tab on any errors or anything that has been reported incorrectly.
What is the Different between Credit Score and Credit Report?
Credit score is decided by your credit report. Companies and lending institutions use credit score information to evaluate if you are a risk for the company to lend money to you. A credit score will tell the lender, if you will qualify for a loan, what kind of loan, the interest rate on the loan and what the limit will be on your credit. Credit scores are referred to as FICO score.
Your credit score usually ranges from 500 to 850. If your FICO score is at the lower end, you might have a harder time to get a loan and if you do, your interest rate will be high. If your credit score is above 750, your rates will be much lower.
Your credit score is determined by different factors!
1. Payment record. This is a record of any bills that have been paid late. If there are late payments, your credit score will be lower.
2. The amount of credit that you are using and how much credit you have.
3. The length of time your credit accounts have been active. Your credit score will be much higher if your credit account has been opened longer.
4. How stable and responsible you are on paying your bills on time, the length of time you had your job.
5. Credit Pulls. This is an inquiry that looks into your credit. Hard inquires can give a signal that you have been looking to get loans and could be a poor risk.
A credit report gives information on what you are doing with your credit. It tells you where you have applied for credit, when you applied, the lender that you have borrowed money from and how much money is still owed. It also will indicate if you make your monthly payments on time and if the debt has been paid off.
The bottom line on the difference between credit score and credit report is a credit score shows your worthiness and a credit report gives information on your credit history.
Why 3-in-1 Credit Reports Are What You Can’t Afford Not To Obtain
Credit reporting agencies gather information on your credit history for different lending institutions, banks, credit card companies and student loan companies. In the United States there are three major agencies that deal with credit reporting, which are Experian, Equifax, and TransUnion.
When you go and apply for a loan, whether it is a car loan, mortgage loan, or a credit card, the lending institution will petition for a copy of your credit report from the three credit reporting agencies. This helps the lender to make a decision on lending you money depending on your creditworthiness, which is based on the credit report. Because the three credit reporting agencies are independent, in some cases the reports can be slightly different. In some cases can contain errors and mistakes, which can significantly affect your credit score.
Obtaining a 3-in-1-credit report will enable you to look at your credit history by the three major credit bureaus. It will give you the information on how the credit bureaus are viewing you and the different lenders that have viewed your credit report. It will help you to be aware if any mistakes or errors have occurred, so that they can be fixed.
Why You Should Establish a Good Credit History As Soon As Possible
If you are planning on making any major purchases in your lifetime, it is essential to have a good credit history. There are ways to help to establish a good credit history, by just following some steps.
1. Getting a good credit card deal. Negotiating on getting the best credit card rate and annual fee is essential. Most major credit card companies will help you in achieving and finding the best rate for you.
2. Establish savings and checking accounts. Lenders look at this as a good sign of stability.
3. Apply for a store card. If you can’t get a credit card, store cards are usually much easier to get then a credit card. One or two of these cards are efficient.
4. Use revolving accounts. To get the best credit scores, you need to have had credit at least six months, with one of your accounts updated during that time. By using your credit card regularly, will update the report on a regular basis. This keeps the lender interested in you, but if the card has been issued and not used, the account can be canceled.
Every person in the US is entitled to a free credit report annually from Annual Credit Report or call 877-322-8228, the ONLY authorized source under federal law. so you have to request one (“Take me to the authorized source – FTC.GOV“).
There are also ways to obtain your credit report and the first is getting a copy from one of each credit bureaus. The second way is there are many reputable online companies that can provide you with your credit report in trial period of times. Obtaining a trial credit report will have the same information provided, no different if you had to pay directly for a copy. Using these services that are provided for the public can help you improve your credit position and help you have a good credit report as well as protect you against identity thief.