Credit report of a person plays a major role in approval of a credit card or a loan. Bankers and other financers check the credit report of a person to check the credit worthiness and decide if a person is a potential customer. Understanding how these reports work and doing a credit check at least once a year enables a person to be knowledgeable about his/her stand in terms of finances. This also helps in rectification of any errors in the credit report.
Credit Report What is it?
What exactly is a credit report? It includes basic information of a person such as name, residential address and details about financial matters such as any credit cards or other loans. These details would include the payment history of a person, and the total debt owed. Any bankruptcy filed by a person, liens or judgments would also be included in a credit report. Banks, credit card issuers, insurance companies and prospective employers have access to these reports. Financial organizations check these reports before lending any money. The amount of loan, interest rate and repayment options also depend on the credit report of a person. An individual who performs credit check on a regular basis has access to the information which banks and other financers have. This helps in applying for any loan with basic knowledge about what amount can be expected and the interest rate that would be charged.
What are the uses of credit check?
Regular credit check also helps in finding any errors on the report and getting them rectified. This is necessary in case a person has been a victim of identity theft. When an individual notices any fraudulent charges on the credit card statement or bank account, reporting them to the concerned authorities immediately helps in stopping further charges getting billed. Equally important is reporting this to all the major credit bureaus to avoid any damage to the credit report.
There are many online services which offer free credit check facility. All a person has to do is enter personal details such as name, address, email id, contact number and the credit reports are either sent through snail mail or email. These details are confidential and thus there is no risk involved. These reports can be checked to get information about credit profile from all the three major credit bureaus. This help in understanding a person’s stand in terms of finances.
Apart from lenders credit reports checked by others such as insurance companies or employers can affect a person’s ability to get an insurance policy or a job. Checking credit reports regularly gives a clear picture of do’s and don’ts a person should for follow for improvement of the score. This also gives an insight into why a person’s application for loan or any other credit was denied.