Your credit report is a record of your financial history and how you’ve handled your finances in the past. It includes mortgages, car loans, credit cards, and information on missed or late payments. Your credit report gives lenders access to information that will help them decide if you may be able or willing to pay back a new loan. This information will also affect your credit rate. The better your credit history, the lower the rate when applying for loans to purchase or refinance a home.
Credit reports are created by Credit Bureaus who collect your information and report this information to institutions that request it. The bureau tracks information from banks, credit unions, finance companies, retailers, and savings and loans. Their report will list account or loan balance, date opened or closed, credit limits, and monthly payments. It will also show late or missed payments and delinquencies.
Equifax, Experian and TransUnion are the most commonly used credit reporting bureaus. Each company reports data slightly differently so it is best to obtain a report from each. You are entitled to a free report from each agency once a year. If you are thinking about applying for credit in the near future, obtain a report from each bureau well ahead of applying. If you have no new credit plans, stagger requesting the reports throughout the year to monitor your credit regularly. Visit AnnualCreditReport.com to order your yearly free reports. It is the only authorized source for the free annual credit report that’s yours by law. The Fair Credit Reporting Act guarantees you access to your credit report for free from each of the three nationwide credit reporting companies every year.
