Understanding Your
Credit History Report

The Importance of Understanding A Credit History Report

Your credit history report has a great influence on your financial future. It doesn't matter whether you need to borrow money to buy a house, car, boat or just applying for a credit card, your past credit report will be reviewed by the lender.

In addition to the obvious reasons for credit companies to review your history, potential employers are reviewing these same reports to make determinations about your trustworthiness if employed by them. Landlords also have privy to this information before letting you sign or renew a rental/lease agreement. Everyone want to know how likely you are to pay your bills.

Where Can You Get Your Credit History

You can get copies of your report from several sources. The three major credit bureaus are:

Equifax Credit Information Services - online at www.equifax.com
TransUnion LLC Consumer Disclosure Center - online at www.tuc.com
Eperian National Consumer Assistance Center - online at www.experian.com

A recent amendment to the Fair Credit Reporting Act required each of these national reporting agencies to provide consumers with a free copy of their credit report yearly when it is requested. You can also get a free report if you have been denied a loan. Otherwise, you can buy the record of your history for a reasonable fee.

What Specifically Is This Credit Report About

Essentially, a credit report summarizes how you pay your regular bills, repay loans and how much monthly debt you have. The report consists of a few sections:

1. Your personal information such as your name, current address, previous addresses going back several years, social security number, telephone number, birth date, and current and previous employers. Again, your employment history will cover several years.

2. Your payment habits with banks, finance companies, mortgage companies, retail stores, and utility companies as well as anyone else you have a financial history with. This probably the most important part of your credit report.

3. Public records such as tax liens, court judgments and bankruptcies. These records also lend quite a bit of information about your credit worthiness.

4. All credit grantors and other individuals and companies that have received copies of your credit report.

5. Lists of companies that have received your name and address in order to offer you credit.

6. Any statement of explanation or dispute that you have made as part of your credit report. Creditors response statements are also included in the record.

Items Not Included In Your Credit History These items are not included and have no impact on your credit score: bank balances, race, religion, health, criminal record, driving record and annual income.

Factors That Adversely Impact Your Credit Report

Some of the history that causes negative marks on your credit report are outstanding debts that go beyond thirty days, consistent late payments on monthly bills, and collection actions that have been brought against you.

You also would not want your history to show that you continuously apply for credit. A short credit history surprisingly can work against you since the potential lender would not have enough information on how you handle bills and loans. A high debt ratio also carries a negative connotation.

Negative information will usually remain on your record for seven years even after they have been resolved. Bankruptcies will be a factor on your credit report for ten years.

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What Your Personal Credit Report Means To You

Your credit report is a reflection of your past financial history -- good or bad. The higher the credit score, the lower your interest rate and vice versa. Knowing and understanding your report and score are vital. If you have not seen yours, you probably should request one soon.

For more information about credit and credit reports, see:

Credit Rating Score - Your Financial Picture
Credit Card Offers - Find Best One For Your Lifestyle
Credit Card Debt Consolidation - Manage Your Indebtedness
Credit History Report Info - Definitive Credit History Report Info
Special Report on Credit and Credit History - From FDIC