5 must know things about credit reports

Cynthia Stewart
May 7, 2007
View Author Bio
Digg It Del.icio.us
Furl It Reddit
Google My Web

1. Experian, Equifax and TransUnion. These three credit bureaus are responsible for reporting your credit scores to banks and other lending institutions. The basic idea behind reporting and tracking your credit history is to get an idea on how prompt and reliable a person is in repaying the loans.

2. The three digit credit score is one of the most important numbers that you will require for getting any loan. A good credit score means low interest rates, better and bigger loans and easy repayment options. On the other hand, low credit score means the opposite.

3. Your credit score is updated regularly. So, don't even think of missing a payment to the lenders. Default on this front could cause a shift in your credit scores and thereby make the loans dearer. Checking your credit score regularly, guards you against any such unpleasant situations. Credit reporting agencies are bound by law to send you a free credit report every year when you ask for it.

4. Credit reports can be questioned and got corrected if found incorrect. Keeping track of every single financial transaction and repayment detail will help you confront the credit rating agencies, when you find any discrepancy in your credit report. Being proactive in tackling such situations with ample proofs to substantiate your point will keep your credit report clean.

5. Taking secured loans like auto loans, personal loans, mortgages, credit cards, lines of credit and repaying them promptly will keep your credit score healthy. It will enable the lending institutions to have more faith in you and hence give you more loan next time on even better terms.