You’ve heard other people talk about it, and you know it is important. But, what is a credit report? Put simply, your credit report is what lenders look at when deciding whether or not to approve you for a new credit card or other loan application. A good credit report can get you better credit card APRs or car loan rates. On the other hand, a bad credit report can also cause you a lot of problems.
There are three major credit agencies: Equifax, Experian, and TransUnion. These agencies, or "credit bureaus," collect and report information about your financial habits and put this information into a credit report. Your credit report typically includes:
- Your name
- Your Social Security number
- Your current and previous addresses
- Information about your current and past loans
- Your public record information (bankruptcies, court judgments, liens)
- A list of companies that have reviewed your credit
Your credit report demonstrates to potential lenders how you handle debt and helps them to determine whether or not you are a good candidate to lend money to. That is why it is important to look at your credit report once a year. This way, if there are any mistakes or problems, you can resolve them with the credit bureau before applying for a new loan.
You can visit any of the three aforementioned credit agencies’ Websites to purchase a copy of your credit report.