Credit Reports
by Jason Gluckman
Have you applied for a credit card, or taken a loan for a new house, car or any other large purchase? If you have, be assured that the lender has taken a close look at you credit report. A credit report reveals a whole host of information about you. It gives a clear indication about your credit worthiness and your ability to pay back loans on time. In fact, it could be an important document for your financial success. A negative report could either deny you the loan or raise the interest rates. Based on the data collected you will get a FICO score or credit rating. The higher the FICO score, the lower your risk rating
Technically, a credit report is a record of financial transactions or deals. It lists the outstanding balances on your credit cards, the loans that you've taken, the balance, and how frequently you miss payments. It also has information about your social security number, address, history of arrests and more. With the concept of risk-based pricing, these reports have become very important, as they fix the APR or annual percentage rate of a credit.
The Consumer Reporting Agency (CRA), through the credit bureaus, collects the information in the reports. The three major credit bureaus are Equifax, Experian and TransUnion. These collate all the credit data, and maintain a huge databank of many individuals. The information is made available to Government agencies, employers, a potential landlord, insurers, investors or anyone with a genuine business claim. They can also be made available in cases of depositions and subpoenas. However, in some states like California, records of arrest, misdemeanors, etc. are to be removed within seven years. Bankruptcy records are also removed within ten years. Medical information, age, marital status or race can only be given with consent. There is increasing support to withhold access to your credit ratings. The FCRA (the federal Fair Credit Reporting Act) helps promote accurate reporting along with the right to privacy.
With so many agencies that could influence your life looking into credit reports, you should know what's in it, too. A complete report will be made available on request from all the three main credit bureaus and other agencies.
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