What Is A Credit Report

What is a Credit Report and how important is it to maintain a high credit score?

Your credit report provides you with information that is in your credit file. It is maintained by the consumer reporting companies which could be given in a report about you to a lender. A credit report lists the full detail on all your credit accounts.

Your credit score is a number evaluated from many different types of information in your credit file. It is used by a lender to help them determine whether you might qualify for a particular credit card, loan, or service. Most credit scores estimate the risk a company incurs by lending you money or providing them with a service. In other words, the likelihood that you would make your payments on time in the future. The higher your credit score, the less risk you represent to a lender.

By paying your bills on time, you can maintain a good credit rating and may qualify for lower interest rates whenever you decide to borrow money. Never wait until the last day to pay those reoccurring bills. You will you incur nasty late-payment fees and trigger higher interest costs. Payment history is one of the biggest factors in determining your credit score.

A single late payment over a long period of time might not cause any damage to your credit report. But making a habit of missing payments can result in real damage to your credit file and credit score.

Lenders tend look at your recent payment history, so be really careful with those payments in the months before you apply for any loan or credit card.

What Is A Credit Report

So just what is a credit report used for? It’s needed so you know where you currently stand financially so you may head in the right direction. Take the time to learn more about how to improve your credit rating and get those cheap interest rates you deserve.

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