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How Your Credit Reports Affect Your Credit Score

By Janet Lacey
Published: Friday, November 5th, 2010

This article discusses the effect of credit report standing to credit scores.

In this generation of checkbooks, credit cards, ATM cards and debit cards, it is no longer unusual for anyone to gain debts or credit. Credit may come in the form of loans, mortgages, credit card charges, and even apartment rentals to name a few, but in order to apply for these, certain conditions must be met by the hopeful applicant. The biggest factor affecting credit applications must be a person’s credit score.

A credit score is a 3-digit number which serves as a grade or a rating of a person’s creditworthiness or his ability to pay his debts. Through this score, lenders are able to assess if a person is worthy to be granted a loan, or in the case of insurance companies, to identify if a person is worth insuring. Therefore, in order for a person to be approved for his applications for credit, he or she needs to reach a decent credit score. A score of 720 and above is considered the prime score for most credit applications.

With these in mind, it is also imperative for a person to know those that affect their credit scores. The main factor influencing these scores is the credit report because it is where the information needed for analysis is taken from. This is due to the fact that your credit report includes all the things you have done with your finances – newly opened accounts, credit charges, and payments to credit, even personal information and criminal records! It is literally a documentation of your self! So, in order to have a good credit score, you must have a clean credit report.

Credit reports are compiled or researched by the three main credit bureaus TransUnion, Experian, and Equifax. These bureaus provide free credit reports to consumers in a span of one year so that a consumer may review his or her credit report thrice a year. This is a good thing since regular monitoring of credit reports are essential in order for a consumer to detect errors in his report that could adversely affect his credit rating. Not only that, the errors that may present in a consumer’s credit report may be due to identity theft.

To put it simply, if a person monitors his credit reports regularly, he will be able to check for errors which may be due to a mistake by the credit bureau or which could be a result of identity theft. Either way, the effects are mostly negative for the consumer’s credit rating. Errors could lower a consumer’s score making it hard for him to apply for loans and mortgages that is if he is not rejected. Also, with regular credit report monitoring, the consumer will be able to see how his financial status is faring and thus, can make adjustments for it.

There is no denying the great impact of a person’s credit report to his score; therefore, it is important to keep your credit reports at its best state to have a high score.

AUTHOR INFO BOX: Credit reports are essential for the computation of your credit scores. Improve credit scores by guarding the information entered in your reports. Apply for online credit reports at

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