9 Things You Must Know About Credit Reports And Credit Scores

Most consumers have heard about credit reports and credit scores, and they know that these scores often dictate whether or not they can get a credit card or the quality of the card that they qualify for. However, very few consumers order their credit reports and read them over.

It is always to your advantage to know everything possible about your credit score and to check your profile for errors. Your credit report has a lot of say in the things you do, and that is why you should always keep a close eye on your score and your report. Don’t settle for bad credit year after year when you can take steps to repair it.

You Can Get Your Report For Free

free-credit-score

It is entirely possible that you have seen the commercials on television for the websites that claim to be able to get you your credit reports for free. It sounds too good to be true, but you do have the ability to get a free report from each of the three major credit agencies once every 12 months.

The Fair Credit Reporting Act is a federal law that was initially passed in 1970 to help protect consumers. Over the years, it has been amended several times, and it offers users some nice benefits. One of those benefits is a free credit report once every 12 months from each of the major reporting agencies. They are:

Trans Union
Experian
Equifax

Your Credit History Verifies Your Personal Information

You may be asked for your social security number when you fill out an application for employment, credit, or an apartment. Your credit report has all of your past addresses, past employers, and any aliases you have ever gone by in the past. If the information on your application does not match your credit profile, then you could be denied the things you want.

It always helps to know that your credit report is used for more than just verifying your credit because that underscores the importance of checking your credit profile for accuracy. If there is a discrepancy between your credit report and your application, it will be your credit report that gets the final word.

Your Credit Score Is Used When You Apply For A Job Or A Credit Account

When you request a credit card, most credit card companies only look at your credit score. You may have hit some hard financial times recently, and they caused your score to drop, but none of that matters to the credit card company. The truth is that your ability to get a credit card, car loan, or mortgage depends on the strength of your credit score.

Sometimes you can find people who will help you with a car loan, even if you have bad credit. For example, ValleyAutoLoans.com has loan officers who will look at your entire report instead of just your credit score. However, that can be rare, and you often have to ask for a complete review like that from other lenders. Keep this in mind when looking for credit card lenders, find lenders who will be willing to help those with poor credit, to repair their credit history and get the credit card they need. We will be able to send you credit card reviews by e-mail so you can choose a lender that will do this.

Are you applying for a job where you will be in charge of the money? For example, are you trying to get employment in the accounts payable department of a local company? If your credit score is low, then that employer is going to assume that you cannot manage your finances very well. If you cannot manage your finances, then that employer may be hesitant to trust you with the company finances.

Getting Car Insurance Or A Cell Phone Could Require Good Credit

When you try to get a cell phone, you may have had the sales associate ask you for permission to run a credit report. If your credit score comes back below the guidelines the company uses, then you may have to pay a hefty deposit to get your service turned on. The same may also apply to the local electric and gas utility as well.

There is also a chance that your car insurance premium may depend on your credit score. If you have a low credit score, then the insurance company may consider you a risk to miss your premium payments and give you a higher monthly amount. It pays to make sure that your credit information is accurate, and it also pays to keep your credit score as high as possible.

Your Credit Score Is An Indication Of Your Credit History

Lenders and credit card companies use your credit history to determine your financial habits. Your credit score is something that is affected by your total payment history, and by recent events as well. A creditor can look at your credit report and immediately determine whether or not you pay your bills on time and in full.

Your credit score is also an indication of how well you manage your finances. If you have more credit that your income can handle, then that will affect your credit score. Consumers need to understand just how much of an indicator a credit score is and how it can tell the entire story of your financial habits in just one number.

It Is Possible To Improve Your Credit Score

No matter what kind of bad credit incidents are found in your credit history, you can still do simple things to contribute to improving your score. For example, by simply paying all of your monthly bills on time and paying the full monthly payments, you will enhance your credit score immediately and significantly.

Another thing you can do to improve your credit score is to pay down your credit card balances to around 20 percent of your available credit. The biggest mistake people make is to pay off their cards and then close their accounts. Your credit score will benefit much more if you keep a small balance on each card, use each card every month, and then make your payments as instructed.

The Credit Agencies Have Direct Relationships With Your Creditors

One of the common questions that consumers have about credit reports deals with where the information on their reports comes from. The credit reporting agencies have direct relationships with all of your creditors and the agencies get their information first-hand. When you make a payment on your credit card, the credit card company sends a note to the reporting agencies indicating that you made your payment. If you do not make your payment, then that is also noted.

The credit reporting agencies also have direct relationships with collection agencies, mortgage companies, auto loan lenders, and any creditor that you do business with. If you apply for a credit account, then that credit company reports your activity to the reporting agencies directly. All of the information that is on your credit report is taken first-hand from the companies that you do business with every day.

Applying For Credit Can Hurt Your Credit

As we mentioned earlier, every credit company alerts the credit reporting agencies every time you apply for a credit account. Why is that significant? Because applying for too many credit accounts will have a severe adverse effect on your credit score. That is why it is so important to know what the best credit card deal is before you apply to the wrong lender. Remember that you want to show that you can manage your finances efficiently and applying for a multitude of store credit cards is not showing the mortgage company that you can handle money.

Any time a company makes an inquiry about your credit profile, it is noted on the profile itself. That is why it is a good idea for you to check your credit profile once in a while to see who is making inquiries about your financial information. If you see suspicious activity on your credit profile, then you need to discuss that with the credit reporting agencies immediately.

Your Credit Report Matters

If you ever plan on buying a house or a car, then your credit report matters. If you ever plan on applying for a job or trying to get an apartment, then your credit score matters. Consumers need to keep an eye on their credit scores and make sure that the information in their credit reports is accurate at all times.

Monitoring your credit reports can also help you to detect any potential attempts to steal your identity or attempts to open fraudulent credit accounts in your name. It is in every consumer’s best interests to keep a close eye on the information that gets posted into their credit reports on a regular basis.

Your credit score and your credit report act as summaries of your life to creditors who do not know you but are being asked to lend you money. The more vigilant you are in updating your credit profile and eliminating any bad credit history, the better those creditors will feel about giving you the money you need.

You can request your free credit report right now to review your history before you apply for any other credit loans.