Tuesday, October 8, 2013

What is a credit report and how does it work?

A credit report is a detailed data of your borrowing and repaying the loan. It has all information about the loan you have applied for, taken out and when you paid off the loan. It has also the records of the current outstanding balances and time of repaying them. The report will include the details of any higher purchase agreements, cell phones, bank accounts and credit cards.

Loan providers make use of your credit report to witness how well you had performed in your previous credit obligations and decide whether or not you should be allowed to have loans.

Creditors make calculations as per the data mentioned in your credit report. There are three main credit reporting agencies – Equifax, Experian and lenders make contacts when you apply for a loan. They request for a replica of your credit report from these credit agencies and decide whether to give you loans or not.

Your own personal FICO score is also important while applying for loans.  So, get a copy of your credit report before applying for a loan and find out where you stand and what can be done to get loans easily and quickly.