How Much Do You Know About Your Credit Report?

You perhaps know all too well that the information that is contained in your credit report is used by the finance and credit card companies when considering whether to extend you credit, but are you aware of exactly what information your personal credit report contains? Did you know for instance that the details which are contained in your credit report could affect whether or not you are able to purchase a new house or are going to need to continue to live in your current 'shoebox'?

A lot ofIn a lot of cases people think that if a lender looks at your credit report they are simply looking at your credit score and, although this is unquestionably one thing that they do look at, they are looking at a great deal more. Above all, lenders are looking to see the amount of debt you have in comparison to your income and even reasonably small accounts, such as those with a mail order company, will be treated as an income deduction when considering a loan application.

If a lender sees that you have got less money coming in than you have going out then your loan application will automatically be reject. Indeed, by law a specified percentage of your income must be available to meet loan payments before the lender is permitted to approve it, whatever the purpose of the loan.

Lenders are also looking at your credit history for the past seven years to see how you have managed any loans during that period. Specifically, they are looking to see if you have made payments on time and will take note of any payments that were more than thirty days late. It might not have seemed especially important to you at the time that you got into difficulty and were late making payments for a few months on one of your accounts, however any new lender is certainly going to take this into account when assessing the risk of lending to you now.

Lenders 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 there are payments outstanding on a current agreement credit card companies and other lenders will be very wary about giving you additional credit before these are cleared.

Finally, your credit report will show whether you have filed for personal bankruptcy, usually within the previous ten years. A few people believe that a lender is much more likely to advance you credit if you have filed for bankruptcy because they enjoy the added protection of knowing that you are not permitted to file again for several years. However, this is not true and filing for personal bankruptcy is seen as a red flag by the finance and credit card companies showing that you have already demonstrated a tendency for getting yourself in over your head when managing your finances.

Your credit report is a very important document that you ought not only to understand but which you ought to review from time to time for your own protection and peace of mind. Fortunately, the law states that you must be provided with a copy of your personal credit report once every year if you request it and so the first thing you need to acquaint yourself with is how to obtain your free annual credit report. Having received your report you then have to study it carefully to make sure that it is accurate and then to ask for it to be amended if it is not. Also, 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 such questions as how can I remove a judgment from my credit report?