Your Credit Report: What You Need to Know
Your credit report is a "report card on your personal finances."So what's the big deal? How much difference do a few percentage points in interest make?
It's one of the most important report cards of your life because it could cost you or save you a lot of money. Why?
"Based largely on the information in your credit report, and the resulting credit score you achieve, lenders determine whether or not to extend you credit, and how much interest you will pay for virtually everything you finance."
Because, based largely on the information in your credit report, and the resulting credit score you achieve, lenders determine whether they'll extend you credit, and how much interest you'll be charged for virtually everything you finance, from a home to a car, to credit cards, to home improvements or furnishings, to insurance, and the list goes on and on!
"...Over your lifetime, the amount of money your credit can cost you, or save you is staggering"
Brace yourself. Over your lifetime, the amount of money your credit can cost you, or save you is staggering. It can run into the tens of thousands or literally hundreds of thousands of dollars when you factor in the total amount of additional interest you might have to pay on your home or refi, automobile, revolving credit cards, and much more.
The bottom line: your credit report is serious business, well worth protecting and monitoring on an ongoing basis so you get the credit you deserve!
Information on your credit history will be contained in three separate credit reports from each of the credit bureaus: Equifax, TransUnion, and Experian. It's important to check and monitor all three of your credit reports because the information in each report may vary. Why? Because, different creditors may report your credit account and payment information to separate bureaus, and companies checking your credit may only use one of the three credit bureaus
Your Credit Report and Identity Theft Protection
It's not only important to monitor your credit reports on a regular basis to help ensure that you get the credit you deserve, it also can provide you with a "first line of defense against identity theft."
For example, you review your credit report and discover that your personal information has been changed without your authorization or you find a credit card inquiry or account in your name that is not yours. Both of these situations can be an indication that your identity has been stolen, and you may need to take immediate steps to file a report, contact the credit bureaus, and your creditors.
Your credit report
provides your credit history as it has been reported by lenders to one or more of the three credit bureaus, Experian, TransUnion, and Equifax. Let's see what information is typically contained in a credit report.
Personal Profile (Name, Address, Social Security Number, Birthday, Employment Info)
Credit Summary An overview of your current and past credit status, including the total number of open and closed accounts in your name, the balances, and delinquencies.
Public Records State, Federal, and County records on Bankruptcies, foreclosures, suits, wage attachments, liens, judgments, overdue debt from creditors/collection agencies, etc.
Credit Inquiries - A record of who has obtained a copy of your credit report. Inquiries remain on your report for up to two years.
The next step: How do all of the above items work together to determine your credit score, how can you monitor your credit report and score, and what are the steps you can take to improve your credit standing.