Essay: Credit reports

The report which awakes about an individual’s past borrowing & repaying, including information about bankruptcy and late payments. Credit report contains information regarding all the financial actions. If an individual has a loan account then the history of repayment and all related details has to be in credit report.
Functionality-
Activities of the last seven years is punched in a credit report, this includes accounts like credit cards, car loans, home loans and store accounts, and can include accounts from creditors like cell phone companies and cable companies. Bankruptcy is also listed, and remains on your report for 10 years.
A credit report mention whether the accounts are felonious or in good standing, if there are or were late payments, if the account has gone to collection and the length of time the account has been open. From this data, lenders can decide on your credit value.
If report is negative then can mention like negative credit rating, bad credit history, Adverse credit history, also called non-status credit history, sub-prime credit history, impaired credit history, and poor credit history. A negative credit rating not desirable to lenders and other extenders of credit for the purposes of loaning money or capital
One more factor in determining whether a lender will provide a consumer credit or a loan is income of a borrower. The higher the income, all other things being equal and the more credit the consumer can admittance. However, lenders make credit conceding decisions based on both ability to repay a debt and willingness as indicated by a history of repayments whether it is regular or missed payments.
These factors help lender to take the final call of granting loan or not and on what conditions such as time limit and interest rate. With the approval of risk-based pricing on almost all lending in the financial services industry, this report has become even more vital since it is usually the exclusive element used to choose the annual percentage rate (APR), grace period and other contractual commitment of the credit card or loan.
Credit history applies to only one country. In fact within the same credit card network, not even single information is not shared between different countries. For an example, if a customer has been living in Australia for many years and then moves to the United kingdom, when they apply for credit cards or a mortgage in the U.K., they would usually not be approved because of a lack of credit history, even if they had an good credit rating in their home country and even though had high salary in their home country.
An immigrant has to establish a credit history from scratch in the new country thus it becomes quite difficult for immigrants to obtain credit cards and mortgages until after they have worked in the new country with a handsome income for many years.
Few credit card companies (e.g. American Express) can transfer credit cards from one country to another and from this help started in a credit history.
Everyone should review credit report at least once a year so a one can know its worth. Especially For the first timers it can be confusing to understand credit report so it will be easy if breakdown of the type’s information contained in report is jolt down-
1. Personal Information on Your Credit Report
In credit Report name, addresses, Social Security number, date of birth and employment information are used for identity verification. These factors are not used in credit scoring as updates to all this information come from information you supply to lenders and other relevant company.
It’s common to have spelling mistake and duplication of your name is possible in this regard agencies leave these variations to maintain the link between your identity and the credit information. Having different variations of your name and old addresses won’t bring any negative impact to the credit score as long as it’s actually your information. Guarantee should be there about personal information as identity theft is possible.
2. Credit Summary
The credit summary summarizes information about the different types of accounts you hold whether account is open or closed in public records, and the number of inquiries made against your credit in the last two years. This section lists the balance, total number, current number and number of delinquent accounts. It includes the following account types: Real estate accounts, any mortgages that you have Revolving accounts, like credit cards and lines of credit, Instalment accounts and Collection accounts
3. Account History
The account history section of your credit report includes each of your credit accounts and details about how you’ve repaid. Your account history will be in detail, but it’s important that you read thoroughly to assure the information is being reported correctly or not
Each account will contain the several information like Creditor name, Account number, Account Type, Remarks are comments made by the creditor about your account, Payment status, payment history, Collection accounts, Responsibility, Monthly payment, Date opened, Credit limit or loan amount, Date reported, Balance, High balance or high credit, Past due.
4. Public records
Public records can severely damage your credit; it’s good to keep this section clear, it Includes information like bankruptcies, tax liens, state and country court record, judgments, and, in some states, overdue child support. Between 7-10 years a public record can remain on your credit report Depending on the type of account, a customer hold. Only rigorous financial blunders appear in this section, not criminal arrests or convictions.
5. Credit inquiries
List all parties who have accessed your credit report in past two years. Soft and hard inquiries are shown on demand accordingly. Only “hard” inquiries are shown to lenders and “soft” inquiries consisting of inquiries made by lenders for promotional purposes.