What Does Your Credit Report Say About You?
Filed under Credit Reports
You perhaps know all too well that the information in your personal credit report is used by the credit card and loan companies when deciding whether to extend you credit, but are you aware of just what is actually in your personal credit report? Did you know for example that the information that are contained in your personal credit report could influence whether or not you can buy that new house or will need to stay in your present ‘shoebox’?
Many people think that when a lender looks at your personal credit report that company is simply looking at your credit score and, although this is without doubt one thing that they do look at, they are also looking at much more. Above all, lenders are looking at how much debt you have compared to your income and even reasonably small accounts, such as those with a mail order company, will be considered as a deduction from your income when considering a loan application.
If a lender calculates that you have got more money going out than you have coming in then your request will undoubtedly be turned down. In fact, the law requires that a certain percentage of your income has to be available to meet loan payments before the lender can approve it, whatever the reason for the loan.
Lenders are also looking back at your credit history for the past seven years to see how well you have handled any loans during that period. In particular, they are looking to see if you have made payments on time and will play close attention to any payments that were more than thirty days late. It may not have appeared especially important to you at the time that you ran into a few problems and were late with your payments for a few months on an account, however any new lender is certainly going to consider this when determining the risk of lending to you now.
A lender will also look to see whether any of your accounts have run into debt during the last seven years and whether or not these debts have now been cleared. If you have payments outstanding on a current loan agreement lenders will be very wary when it comes to giving you further credit until these are paid off.
Finally, your personal credit report will show if you have filed for personal bankruptcy, in most cases in the last ten years. A few people believe that a company is much more likely to lend to you if you have filed for bankruptcy as they have the protection of knowing that you cannot file again for several years. However, this is not the case and filing for bankruptcy is seen as a red warning flag by the finance and credit card companies indicating that you have already demonstrated a tendency for getting yourself in over your head when it comes to handling your money.
Your personal credit report is an extremely important document that you should not only understand but which you should review occasionally for your own protection. Luckily, the law states that you must be furnished with a copy of your personal credit report once each year if you ask for it and so the first thing which yu need to acquaint yourself with is how to obtain your free annual credit report. Once you have got your report you then have to study it with care to make sure that it is accurate and then to request that it be changed if it is not. Also, there are some instances in which you can request alterations to your report, even when it is accurate, and here you need to have the answers to hand for such questions as how can I remove a judgment from my credit report?
Related posts:
