Consumer Credit Report – Do You Know What Yours Says?

A consumer credit report is the annual assessment of each person’s credit standing. By knowing what is on your you can get a lot of benefits when you go to get credit based services like loans, credit cards and even rent and phones.

Each year, by law, American citizens are entitled to obtain a free copy of their annual consumer credit report which basically details their credit risk profile. This allows companies who are considering extending some type of credit to the consumer to make an educated decision on the risk of that transaction. The better the credit of the consumer, then the better chance that company has of being paid back by the consumer.

By having a good credit report, a consumer can gain advantages such as cheaper loans and credit cards and avoid the embarrassment of being rejected for things like rental apartments and telephone contracts.

There are three companies which can offer a free consumer credit report (Experian, TransUnion, and Equifax) and are legally obliged to offer that annually.

By knowing what is in your credit report, you can negotiate for better credit condition (if you’re report is good) or you can strive to repair your credit by challenging inaccurate or false items on your report.

To do that, you simply need to obtain a copy, unfortunately you need to actually a report from all three credit bureaus. Why, because lenders don’t report to each bureaus, they just report to one with your past financial information – so if you only obtain a copy of one report then you will not have your complete financial position and history, it is recommended that you get all three reports – they way you know where you stand and you start improving nay negative information, it is common for your personal information to be old or incorrect.

Make sure you update them with your correct address. Be sure not to use companies that claim they can quickly improve your credit score, they are most likely to be scammers.

Assess the items on it that are negatively affecting your credit score and challenge those items to the relevant consumer reporting company. That company is then legally obliged to pursue the matter.

The thing is that challenging your credit report takes knowledge and time and so it may often be a better option to hire a credit reporting company to do the leg work on your behalf.

It’s essential you know how lenders will read and give weight to different parts of your Credit Report:

The American company FiCO has a tool that helps credit bureaus determine your credit score – below is the matrix that is used:

Payment History 35%
Amount Owed 30%
Length of Credit History 15%
New Credit 10%
Types of Credit Used 10%

Such companies know exactly what can be challenged as well as how to do it and who to contact about your credit.

By having a good credit report, you can make your own life a lot easier and cheaper in the long run.
Hopefully this article has been helpful for you and you will now know exactly what yours says.