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What is a credit report?

By Janet Lacey
Published: Monday, November 2nd, 2009

All of us have different lifestyles. Right from the moment we wake up, no two individuals can have the exact same events the affect them or are a part of for a typical day. Hence, when it comes to our finances, it is understandable that each person’s financial situation is unique, even if they are working for the same company and doing similar jobs. In fact, regardless of what a person earns as his income, it is his expense that is going to determine how financially sound he is going to be. Due to this reason, there is something known as credits score that identifies people financially.

A credit score is important to understand that it affects the choices that we make. The credit score will be important if we are planning to buy a car or even go in for a house. Without a good credit score, it is next to impossible to get any worthy loans at interest rates that can help us pay it back. In fact, credit scores make it easier for the banks to understand what kind of a customer you are and whether you will be in a position to pay a loan back if one is given to you.

Hence, it is only natural for a person to want to know the credit score. If one has an idea about his credit score, he might be more careful with his spending and restrict it only to commodities that are absolutely essential or required. A credit report might also help you realize the factors that are affecting your credit, which can then be used to help you fix your credit score and potentially increase it to something that is more respectable. Many people are unaware of what causes a low score, and the report might provide a valuable insight in this regard.

Moreover, there are many companies that even provide a free credit report and charge for the subsequent ones. However, keep in mind that having a credit report checked frequently can cause your score to drop. So, only request for a credit report when you need one, and not do so unnecessarily.  For finding out about free credit reports, you can use the internet and do some research on your own. With this information, it is possible to get detailed credit reports as well and ask someone knowledgeable to better explain your credit score to you.

Now that you are aware of what a credit report is, you might want to go out and get your report check out right away. However, don’t hand out your social security number to anyone, as it can be used for other purposes as well. Give it out to only people who are authorized to have it and the ones that you can trust. Also, use the credit report wisely and not to make any hasty decisions. Since it takes to build your credit score, it is advisable to not do something that is going to reduce it and make it problematic for you to get loans and other forms of financial help at a later stage.

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