Know about your credit reports

There are many consumers who finance their homes with mortgages and make payments for their car through loans. Young students take loans to meet their educational requirements and many consumers buy goods or services with credit cards. You need to apply for credit because it cannot be received as a matter of course. The finance companies would not grant you a loan without knowing something about you. Initially banks or retailers used to call each lender a consumer listed on an application form before extending credit but today they rely on credit reports so it is essential for you to know your credit reports.

Your credit report is like a record of your credit activities consisting of a list of loans or accounts you are having, the balance amount in it and your frequency of making payments. It also includes information regarding any action that was taken on you because of unpaid bills. Your credit reports come from consumer reporting agencies (CRA). These are companies that are involved in the collection and selling of credit information. They collect information about your credit activities; store it in a database and charge fee for supplying it to the lenders or consumers. There are three major credit-reporting agencies that operate on a national level along with several other small companies that serve at a local level. The following people can view your credit reports:

• A lender who is granting you loan
• An employer who is considering you for a job, reassignment, promotion or even retention
• An insurer who will give you an insurance policy
• Government agencies that will be reviewing your financial status or government benefits.
• Any other person who has a legitimate business need for the information like a potential landlord.

There are four types of information on your credit reports:

• Recent inquiries
• Public record information
• Credit information
• Identifying information

Since a credit report can affect your chances of getting qualified for a loan, job or insurance it becomes your responsibility as a consumer to make sure that you make payments on time and maintain a clean report.