What is in a Credit Report? By Tony Francis At Isnare.com Ezine Articles

Most of the transactions in your life would involve money. And not all the time will you be able to purchase something with cash in hand. That's where credit takes its place in the picture. Before involving yourself in financial transactions, you need to fully understand how credit and credit reports work.

How does credit work?

Lenders will most likely grant your loan applications if they see that you have good credit. Your credit reflects your image as a borrower. A favorable credit could be achieved when you pay your debts on time. There are different ways by which you can build your credit and other ways too to repair damages as well.

How does credit report work?

The idea of a credit report started when a third party got involved in credit transactions. This party kept a record of all credit information for other lenders to have an idea of how well a borrower can pay his debts. However, the first credit reports weren't really reliable because they only contained negative information.

After some time, developments took over which made credit reports more accurate hence more reliable for lenders and consumers. Today's credit report is made up of the following information:

Personal Identification

Most commonly personal information includes your name, present and previous address, contact numbers, birthday and social security number. If applicable, your spouse's name is included too. Other than these, your credit report will also contain information about your previous and present employers.

Credit History

A credit report won't be a credit report without information about your credit activity. Since this document should be able to tell lenders what kind of borrower you are, it contains your bill-paying history with banks, finance companies and other establishments you do or have done credit transactions with. It includes the type of accounts you have and related information about them. Of course, that would also include delinquencies in payments.

Public Records

Apart from personal information, your credit report will also contain facts about tax liens, court judgments and bankruptcies. These kinds of information will determine your credit worthiness.

Report Inquiries

Included in your credit report is a list of granters and other people you have done transactions with and who have requested for a copy of your credit report. Apart from this, the list of companies who offer you credit is also included in the report. The latter don't necessarily have your credit report but since you qualify for the things they offer, insurances included, they belong to the "pre-approved" credit offers.

Dispute Statements

Finally, a credit report also contains information about the disputes you have previously filed about the report. The credit bureaus would notify both the consumer and the creditors about the disputes filed.

Credit Report versions

Credit report bureaus can release different kinds of credit reports according to who requests for it. Consumers usually have the kind which contains all the information above and different inquiries about the report. On the other hand, the creditors have the report containing the above information and only the inquiries made by companies with a "permissible purpose".

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