You probably know only too well that the information in your credit report is used by the credit card and finance companies when deciding whether to extend credit to you, but do you know what information your credit report contains? Did you know for example that the information that are contained in your personal credit report could influence whether or not you can purchase that new home or are going to need to stay in your current 'shoebox'?
Many people think that when a lender looks at your personal credit report that company is merely looking to see your credit score and, although this is definitiely one of the things that they do look at, they are in fact looking at far more. Above all, they are looking to see the amount of debt you have compared to your income and even relatively small accounts, such as those with a mail order catalogue company, will be considered as an income deduction when considering an application for a loan.
If a credit card company, bank or other lender comes to the conclusion that you have less money coming in than you have going out then your application will automatically be reject. In fact, the law requires that a specified percentage of your income has to be available to meet the payments on a loan before the lender is allowed to approve it, whatever the purpose of the loan.
Lenders are also looking back at your credit history for the last seven years to see how well you have managed any loans during that period. In particular, they will look at whether you have made payments on time and will play close attention to any payments that were more than thirty days late. It may not have appeared particularly important to you when you got into difficulty and were late with your payments for several months on an account, but a new lender will certainly take this into account when determining the risk of lending to you now.
A lender will also look to see if any of your accounts have run into debt during the last seven years and whether or not these debts have now been paid. If you have payments outstanding on a current agreement lenders will be very wary when it comes to giving you additional credit before these are cleared.
Finally, your credit report will also show whether you have filed for personal bankruptcy, genrally within the past ten years. Some people think that a lender is more likely to lend to you if you have filed for bankruptcy as they have the protection of knowing that you cannot file again for several years. However, this is not the case and filing for personal bankruptcy is seen as a warning flag by the credit card and finance companies showing that you have already shown a tendency to get yourself in over your head when managing your finances.
Your credit report is a very important document that you should not only understand but that you ought to review occasionally for your own protection and peace of mind. Luckily, the law states that you must be furnished with a copy of your credit report once a year upon request.
Many people think that when a lender looks at your personal credit report that company is merely looking to see your credit score and, although this is definitiely one of the things that they do look at, they are in fact looking at far more. Above all, they are looking to see the amount of debt you have compared to your income and even relatively small accounts, such as those with a mail order catalogue company, will be considered as an income deduction when considering an application for a loan.
If a credit card company, bank or other lender comes to the conclusion that you have less money coming in than you have going out then your application will automatically be reject. In fact, the law requires that a specified percentage of your income has to be available to meet the payments on a loan before the lender is allowed to approve it, whatever the purpose of the loan.
Lenders are also looking back at your credit history for the last seven years to see how well you have managed any loans during that period. In particular, they will look at whether you have made payments on time and will play close attention to any payments that were more than thirty days late. It may not have appeared particularly important to you when you got into difficulty and were late with your payments for several months on an account, but a new lender will certainly take this into account when determining the risk of lending to you now.
A lender will also look to see if any of your accounts have run into debt during the last seven years and whether or not these debts have now been paid. If you have payments outstanding on a current agreement lenders will be very wary when it comes to giving you additional credit before these are cleared.
Finally, your credit report will also show whether you have filed for personal bankruptcy, genrally within the past ten years. Some people think that a lender is more likely to lend to you if you have filed for bankruptcy as they have the protection of knowing that you cannot file again for several years. However, this is not the case and filing for personal bankruptcy is seen as a warning flag by the credit card and finance companies showing that you have already shown a tendency to get yourself in over your head when managing your finances.
Your credit report is a very important document that you should not only understand but that you ought to review occasionally for your own protection and peace of mind. Luckily, the law states that you must be furnished with a copy of your credit report once a year upon request.
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