Credit Report Blog
Website CertifiedPrivacy Protected

Why Credit Reports are Important?

By Ruth Racey
Published: Sunday, September 20th, 2009

For many American consumers, keeping track of their credit history is neither a necessity nor an important matter. Some Consumers who love to purchase products using credit cards often think of plastic as the ultimate shopping tool. With it, they can buy almost everything and get to enjoy their purchases as soon as possible.

Unbeknownst to these cardholders, their purchases and spending behaviors can affect their chances of getting more credit in the future. Lavish spending can lead to mounting debts and skyrocketing interest. With the credit industry reeling from huge losses due to the recession, more and more banks are imposing strict policies for cardholders who fail to settle their dues.

Unnecessary spending and irregular payments can convince card issuers and banks that a consumer is financially unable to settle his or her debts. If this is the case, then the cardholder’s credit history and score will suffer. When this happens, the consumer will have a harder time looking for new creditors or getting higher credit limits. Unrestricted expenses might even lead to forfeitures and repossessions. All these can leave lasting impressions on banks and card companies.

In the U.S., the Federal Trade Commission authorizes three major credit bureaus, Experian, Equifax, and TransUnion, to collect information about the spending habits of the nation’s cardholders. Banks and card companies provide relevant information about their customers to the three credit agencies. Consumers can then ask for their credit reports once a year from each of the three bureaus.

Keeping track of credit purchases can be useful especially when a cardholder also retrieves his or her credit report. By closely examining and comparing the report with the consumer’s own records, cardholders can expect to analyze how they spend their money using plastic.

A cardholder who is aware of his or her expenses as well as the information provided in the credit report can better prepare budgets. And because not all Americans keep daily records of everything they buy with credit cards, credit reports can be a useful tool for them to see how much they are spending and on what.

Consumers can also take note of any possible errors that may appear in their credit reports. Some cardholders have even discovered unwanted transactions charged to their cards illegally by poring over their credit reports. By paying close attention to the details indicated in the reports provided by any of the three credit bureaus, consumers can even question entries or purchases that they think are wrongfully charged to their accounts.

The three credit agencies also provide credit reports through several websites. These sites specialize in offering detailed and reliable information to concerned cardholders.

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.