Understanding Your Credit Report
A record that is kept with reporting bureaus of negative credit and or outstanding debt by a consumer.
When consumers are applying for anything from a monetary loan to a purchase with payments, a credit report is usually acquired by the lending company. This is so they can better understand the history that the consumer has with paying back the money that he or she has borrowed in the past.
There are three different agencies that are reported to which are Equifax, TransUnion and Experian. The consumer may notice that the same company may be on one or several of these reports due to individual companies reporting to one or more of them. It is important for the consumer to know that not every lender they are working with will check the same reports.
In the process of paying off debt, a consumer may get updated credit reports and notice that paid debt is still reflecting on one or more of the reports. When this happens, the consumer should contact the reporting agency and let them know that the debt has been paid and that it should reflect as so. This will give them a better credit rating and make it easier to make the purchases or get the loans they are applying for.
Another factor that consumers need to be aware of is knowing the types of debt that are reflected on their reports. There is installment debt, which is a payment that remains the same each month until it is paid off; revolving debt, such as credit cards that are different each month and have interest; and there is also open debt where the full balance needs to be paid each and every month. These are just a few examples of the types of credit.
Each type of debt will have a different reflection on the consumers credit score and each lender will see it differently as well. There are many other things that lenders are going to take into consideration when they are looking at a consumer's credit report, such as the amount of time that open accounts have been on the report and the diversity of accounts that they have
When payments are made on time, it reflects as good history on the credit report, thereby giving the consumer a higher rating. This is the goal that someone should be aiming for in order to be able to make the purchases he or she wants or needs.
Many consumers may not understand their credit reports or how to go about getting it cleaned up to reflect a better rating when there are many negative accounts. We can be of service when it comes to better understanding a current report and how to improve upon it in order to have a credit rating that is acceptable by most lenders. Occasionally, consumers need help with not only improving their rating but also understanding the actual report. When the right explanations are given, it can be easier for a consumer to keep it clean.