Credit Reports - What You Should Know?

A Credit Article Contributed by Nithya K

What is a Credit Report?

A credit report is a record of a person's credit repayment history. This record informs about the history of the person applying for credit.The credit report is provided as a credit file to all the companies or individuals who require information about the applicant.

The credit report is provided by the three big credit bureaus and is used for purposes permitted by the US law. The credit report is generated by the person's credit file.

What Should I Know about Credit Reports?

There are many things about credit reports that should be known to the person taking credit, beforehand. The credit file should be handled very carefully and kept safely. Some pointers towards keeping a regular check on the credit worthiness of a person would go a long way in maintaining a healthy and neat credit history.

Some Reasons to Keep Check on Your Credit Report

1)Inaccurate or Mixed credit files -

Many times inaccuracies on a credit report can result due to a simple human error. This is one reason why one needs to be careful while handling a credit file. But for knowing any kind of inaccuracies in your file, you should first order the credit report. You should contact the credit bureau to mend any such discrepancies as and when you notice it.

2)Payment tracking -

The credit report mainly shows the timely payments and any history of non-repayment. This can happen anytime;after you send the check, a delay in the payment or encashment of the check can cause you a 30-day delinquency. Its important, hence to contact your creditor and explain any such untoward situation, so that the discrepancy can be remedied. Hence its necessary to know about the credit report and read it properly, to keep an eye on the payments made and received.

3)Identity theft -

This is a major reason to order the credit report immediately. Stealing people's identity to assume a false name, and access one's accounts, divert a credit card etc are far too common. So its smart to be aware of these things and look at your credit report regularly. Such an identity thief can harm your future credit worthiness.The best way to catch an identity thief is to get a copy of your credit report and check on any accounts you know that are not yours. Any discrepancy can be reported immediately.

4)Inquiries -

While looking around for more credit or loan, its important to be aware that when creditors check your credit, the action is translated into an inquiry on your credit report. These inquiries can add up, and be seen as negative or bad factors by the creditors. So too many inquiries on your credit report can actually scare away creditors.

5)Credit fraud -

Credit fraud involves the use of your credit card or account number to make illegal charges on your account. Though many consumers are protected financially from such an abuse, many creditors might just raise their interest rates after noting this action. Ordering a personal copy of credit report would help you catch any new activity of which you are not aware on any accounts that you aren't using.

Getting a personal credit report is always a good decision.