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Impact of your credit report on getting loans

By Ruth Racey
Published: Tuesday, May 18th, 2010

Many people know that credit reports are available to consumers once a year after they apply for them but quite a few people do not know the use of their credit report. The following paragraphs will provide information on reasons why your credit report is important and how it can impact your ability to get loans.

Importance of Your Personal Credit Report

Not many people realize that the amount of credit they take and the payments they make are all documented by the credit Bureau. All this information is collected till the person is alive and his ability to get loans depends on his credit document. This document is very important since every time a lender plans to give you a loan he looks at your credit score which is created using the information from this report. A good report ensures that you get credit and loans where as a bad report makes it very possible that you will be asked to pay higher interest rates. Some lenders refuse to give any loans or credit to people who have a negative report.

Importance of an Accurate Credit Report

Since your credit score is calculated according to the information on your credit report, it is very important that all the information on this document is accurate. Incorrect information may cause your credit scores to drop significantly and this will reduce your chances of getting a loan at a low interest rate. If you apply for these reports every year then you should keep all payment documents like bills, loan statements and payment receipts so that when you get your report you can tally the information and make sure that it is accurate.

Getting Your Personal Credit Report Corrected

If you feel that your report is inaccurate then you should double check to make sure that you have not missed any details. When you are absolutely sure that the credit bureau has made a mistake you should contact the authorized consumer reporting company of your problem. While filing a dispute you will need to keep all the original documents with yourself and provide photocopies of the report, bills or loan documents that are in question.

The credit reporting company will get in touch within 30 days and answer any questions you have about the dispute. If any problems are found then you will be sent a corrected document and you will be given the choice to send corrected documents to the companies who received the wrong report in the last 6 months.

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