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Gain a Basics Understanding of Credit Report

By Janet Lacey
Published: Sunday, June 2nd, 2013

For those who do not know a credit report, it is basically your report card on credit usage. Just like good scores on a report card are crucial for getting into a new school or college, a good credit score is important in ensuring lenders see you as credit worthy. Credit reports contain your credit history as reported by lenders who have previously given you credit. This information is used to generate your credit score and it is what determines your credit worthiness to the prospective lenders.

Your credit report will have information like: History of credit use, previous credit providers, if you have defaulted in payment, how much credit you have used, previous/ outstanding arrests/ suits and place of residence. Lenders and business partners look at the information on your credit report and have a clear picture of your borrowing history. All pieces of information are considered before determining your credit score and suitability for credit.

Just like a school report card the score you get determines if you will proceed or remain at the same level. Similarly a good credit score can enable you to reap more credit. Keeping your credit report appealing to lenders and business partners is quite simple.

First and foremost have a copy of your credit report and proceed to check it. All the information required to calculate your credit score is on that report. Ensure that each detail in the report is accurate as far as you know. Any errors in the report should be reported and disputed with the credit bureau and reporting agency.

The second step is ensuring you make timely credit payments at all times. Your history in making credit payments is one of the most crucial factors that determine your credit score on your report. Having reminders can help you make timely payments at all times. Some banks offer customers payment reminders service to help you make timely payments. Enrolling with such a service will be beneficial in maintaining a good credit report.
Reducing the debts you owe is crucial in maintaining an appealing credit report. This however is not as easy as it sounds. Reducing debts owed is not only relevant to your credit score but also important for your financial future. Reducing debts entails abstaining from the use of credit cards and coming up with payment plans to clear credit card debts.
A credit report is what does your bidding when seeking credit from lenders. Maintaining an appealing credit report is no easy feat, but a good credit score ensures you are well covered when you need credit.

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