What Does Your Personal Credit Report Says About You?

Written by admin on January 23, 2009.

You perhaps know only too well that the information in your personal credit report is used by the finance and credit card companies when considering whether or not to extend you credit, but are you aware of just what information your credit report contains? Did you know for instance that the details which are contained in your personal credit report could affect whether or not you can buy a new house or are going to have to stay in your present ’shoebox’?

A lot ofIn a lot of cases people believe that when a company looks at your credit report they are simply looking to see your credit score and, although this is without doubt one thing that they do look at, they are in fact looking at far more. In particular, they are looking to see how much debt you have compared to your income and even reasonably small accounts, like those with a mail order company, will be considered as an income deduction when considering a loan request.

If a credit card company, bank or other lender concludes that you have got less money coming in than you have going out then your loan request will automatically be turned down. In fact, the law requires that a certain percentage of your income has to be available to meet the payments on a loan before the lender is allowed to approve it, regardless of the purpose of the loan.

Lenders will also be looking back at your credit history for the last seven years to see how well you have managed loans in existence during that period. In particular, they are looking at whether you have made your payments on time and will take note of any payments that you made more than thirty days late. It might not have appeared particularly important to you when you ran into a few problems and were late with your payments for a few months on one of your accounts, but any new lender will certainly take this into account when determining the risk of lending to you now.

Lenders is also going to look to see whether any of your accounts have run into debt during the past seven years and whether these debts have now been cleared. If there are payments outstanding on a current loan agreement credit card companies and other lenders will be very wary when it comes to giving you further credit until these are cleared.

Finally, your credit report will show if you have filed for bankruptcy, in most cases in the previous ten years. A few people believe that a company is more likely to advance you credit if you have filed for bankruptcy as they enjoy the added protection of knowing that you are not able to file again for a number of years. However, this is not the case and filing for bankruptcy is seen as a warning flag by the credit card and finance companies showing that you have already shown a tendency for getting yourself in over your head when handling your money.

Your personal credit report is an extremely important document that you should not only understand but that you ought to review occasionally for your own protection and peace of mind. Fortunately, the law states that you must be given a copy of your credit report once every year upon request and the first thing that you ought to acquaint yourself with is how to obtain your free annual credit report. Once you have your report you then need to study it carefully to ensure that it is accurate and to request that it be changed if it is not. Further, there are certain instances in which you can request alterations to your credit report, even if it is accurate, and here you need to have the answers to hand for questions like how can I remove a judgment from my credit report?