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Everything you Need to Know about Credit Reporting

On Behalf of | Mar 6, 2017 | Consumer Protection

If you are in the market to make a big purchase, open a bank account, apply for an auto loan, mortgage, credit card, insurance or even get a new job, then you need to be intimately familiar with your credit report.  Your credit report is basically a sales pitch that tells lenders who you are, how you pay or don’t pay and what you owe.  The following is an explanation of why your credit report and credit score are so important to your financial well-being.

You Need to Care About Your Credit:

Your credit report is a summary of your credit history.  Lenders look to your report to aid in the decision of whether or not to extend you credit and at what interest rate.  Your credit report defines what kind of risk you are to lenders.  Caring about your credit means your credit report will reflect positively and lenders will be more likely to lend you money with favorable terms.

Credit Reports Are More Than Just Credit History:

Your credit report is not just a source for your credit history but reports four different types of information.  This information includes your personal identifying information, like your name, aliases, past and present addresses, social security number, date of birth, employment history and past and present spouses; account history; public record information including bankruptcies, tax liens and judgments; and inquiries into your report.

The Information Contained on Your Credit Report Determines Your Credit Score:

All of the accounts reported on your credit file are used to determine your credit score.  Your credit score is essentially a numerical value assigned to your accounts.  This number tells lenders what type of consumer you are and how likely you are to repay your debts.

Your Are Entitled to One Free Report Annually:

Under the Fair Credit Reporting Act, (“FCRA”), you are entitled to one free copy of your report annually from each of the three major credit reporting agencies.  Your credit score however is a different story, currently there is no law in place that allows you a free copy of your score.

You’re Not the Only One Who Can Review Your Report:

While you can review your report at any time, others may review your report as well.  Banks, credit card companies and other lenders that you have an account with can review your report at any time to check into your current financial status.  Any entity to whom you apply for credit may review your report as well.  Employers are also allowed to review your report, however, if the information contained in your report is used to make any decisions about your employment, your must be provided with notice.

If you believe your rights have been violated under the Fair Credit Reporting Act, contact SmithMarco P.C. for a completely free case review.