What Does Your Credit Report Says About You?

You perhaps know all too well that the information in your credit report is used by the credit card and finance companies when determining whether to extend credit to you, but are you aware of what is actually in your personal credit report? For instance, did you know that the information that are contained in your personal credit report could affect whether or not you are able to purchase that new home or will have to stay in your present 'shoebox'?

In many cases people think that when a company looks at your personal credit report that company is just looking to see your credit score and, although this is unquestionably one thing that they do look at, they are in fact looking at far more. Most especially, they are looking at the amount of debt you have in comparison to to your income and even relatively small accounts, such as those with a mail order company, will be considered as a deduction from your income when considering an application for a loan.

If a lender considers that you have got less money coming in than you have going out then your loan request will undoubtedly be turned down. In fact, by law a specified percentage of your income has got to be available to meet loan payments before the lender is allowed to approve it, whatever the purpose of the loan.

Lenders are also looking back at your credit history over the past seven years to see how you have handled any loans during that period. Specifically, they are looking to see if you have made payments on time and will play close attention to any payments that were more than thirty days late. It may not have appeared particularly important to you at the time that you ran into a few problems and were late with your payments for a few months on one of your accounts, however a lender will certainly consider this when determining the risk of lending to you now.

A lender is also going to look to see if any of your accounts have run into debt during the past seven years and if these debts have now been paid. If you have payments outstanding on a current agreement credit card companies and other lenders will be very wary about extending you additional credit until these are paid off.

Finally, your personal credit report will show if you have filed for bankruptcy, usually within the past ten years. Some people believe that a company is much more likely to advance you credit if you have filed for bankruptcy because they have the protection of knowing that you cannot file again for several years. However, this is not true and filing for personal bankruptcy is seen by lenders as a red warning flag showing that you have already shown a tendency to get yourself in over your head when managing your money.

Your credit report is an important document that you should not only understand but which you ought to review occasionally for your own protection. Luckily, the law requires that you be sent a copy of your personal credit report once each year on request and the first thing that you need to acquaint yourself with is how to obtain your free annual credit report. Once you have received your report you then have to study it with care to ensure that it is accurate and then to ask for it to be amended if it is not. Further, there are some circumstances in which it is possible to ask for alterations to your credit report, even when it is accurate, and here you need to have the answers to hand for questions like how can I remove a judgment form my credit report?