About your credit rating and credit reports

At some point during our lives most of us come across the need to take out credit in some form or another, whether its is in the form of a mortgage, a can loan, a credit card, store cards, catalogues, or any other form of borrowing. However, the key to being able to obtain the credit you need lies in the status of your credit, and more specifically whether you have a good or bad credit rating. Those with a good rating can enjoy great value borrowing for the things they need in life, but those with a poor credit rating will find that they either have to pay extortionate interest rates on borrowing or may not be eligible to borrow money at all.

The relationship between your credit rating and credit reports

The key to the performance of your credit rating lies in the link between your credit score and credit reports. This is because the information on your credit report directly affects your credit rating, and credit reports contain a wide range of financial information that could have a real impact on your rating. This is turn can have a dramatic impact on your future credit worthiness.

The information on your credit file comes from external companies with whom you have financial dealings, and credit reports details a range of financial details such as any loans or credit that you have, whether you pay your bills and financial commitment in a timely fashion, any loans or credit you have applied for, and a range of other details. All of this information is kept on these credit files and credit reports are then used to determine your credit rating or score.

Your credit rating can go up or down based upon the information on your credit report, which is maintained by three main credit reporting agencies. If you have a poor credit rating you can rebuild your credit through making timely repayments on all of your financial commitments, and by successfully taking out credit. If you have a good credit rating, and let your repayments slip you may find that your credit rating goes down.