A credit report is important for a number of reasons. When you make purchases by credit, your payment history is reported to the three major credit reporting agencies. Many companies will review your credit history to determine if they want to do business with you.
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You have three credit scores, one from each credit bureau. Each one is slightly different, but all three play a very important role in your financial life. Your credit scores determine the amount credit lenders will make available to you and the interest rates and payments on mortgages, credit cards, auto loans, insurance policies, and more.
A credit report is a detailed history of the loans you′ve received and credit cards you′ve used that is offered by the three bureaus once a year. If you′ve had collections, they may also appear on any of the credit reports. For each account, the credit report shows your payment history, current balance, credit limit, the date the account was opened, and whether the account is open or closed.
A credit score is a three digit number based on the information in your credit report. The bureaus factor in the number of years you′ve had credit, how much of your available credit you′re currently using, whether you′ve recently made any late payments, and how recently you′ve had any negative actions or credit applications.
First, your credit score is based on your credit report. Any incorrect information could reduce your credit score. A lower credit score can cause your interest rates to rise or you could be denied credit. Your credit report also lists past addresses and employers. Credit report inaccuracies could slow loan processing.
A credit report is often the first place people detect identity theft. By regularly monitoring your credit, you can reduce the damage from credit fraud.
Checking your own creidt score does not hurt your credit!
Under federal law you have the right to receive a free credit report from each of the three nationwide consumer reporting agencies once every 12 months. A Free credit score is not included.