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What Is A Credit Report?
Credit is often used to finance major purchases, such as
homes, automobiles and education, but for the average
consumer, credit also covers the cost of gas and groceries.
All credit purchases leave a paper trail in the form of bank
or credit card statements, but did you know that this
information trail is automatically funneled into your credit
report? A credit report is a detailed outline that tracks
past and existing debts and any other information relevant
to your
credit history.
Typically, a credit report will contain information on any
outstanding accounts, such as bank accounts, credit cards,
and loans, and the pertaining credit limits and amounts owed
on those accounts. The credit report documents both positive
and negative financial situations. For the former, it may
track your successful repayment history, and for the latter
it could include public records on bankruptcies and
foreclosures.
A credit report includes personal records, such as your full
name, date of birth and Social Security Number, along with
other sensitive materials on your identification. It is
important to safeguard this information against crimes of
identity fraud. Experts on identity fraud advise consumers
to use their credit reports as a means of defense. Limit
access to your credit information, and be sure to regularly
check on your report in order to ensure an accurate, updated
report.
Credit reports can play an important role in the fate of
your purchasing power and financial health.
Lenders and other creditors use credit reports in order to
create a case for or against extending lines of credit. When approaching a
bank for a loan or a credit card company for a line of
credit, your credit report enables the lender to assess your
past financial history. Using this information, they decide
the terms of your credit agreement and interest rates. Thus
a credit report is not only an account of your past
financial dealings, but an assessment of your future
financial capabilities.
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