by: John Mussi
If you've ever tried to figure out exactly what your credit rating is, you'll know that your credit report is vital to knowing and understanding exactly what your current credit situation is. Of course, the need to know your credit rating shouldn't be underestimated or overlooked after all, good credit can open doors for you whereas bad credit can cost you loans, chequeing accounts, financial products, and even certain jobs and opportunities.
If you've never checked your credit, then you should obtain a copy of your credit report so that you can determine exactly where you are credit-wise and confirm that everything that affects your credit report is accurate.
What a Credit Report Is
Your credit report is a listing that is compiled by various credit agencies showing the various accounts that you have open and whether they are up to date or behind. Based upon the information provided in your credit report, you are given a numeric score the higher the score is then the better your credit is, and the lower the score is then the worse your credit is.
As time goes by older debts and accounts will expire from your report unless new reports are being made to the credit agency by the provider of the credit line, loan, or account, in which case only the older reports that they have made will expire.
On average it takes five to seven years for any particular report to disappear from your overall credit report, though there are cases where certain reports are removed before that time.
How Your Credit Report Is Used
Your credit report can have several different uses, ranging from getting you approval for a loan to being a part of the job application process. It is generally used to gauge your financial situation and make sure that you can afford to pay your bills most lenders are hesitant about giving a loan to an individual who has been several months late on all of their bills for several months previous to submitting a loan application. Likewise, employers who work in the finance industry or some other fields might not want to hire someone who is clearly having severe financial problems in order to reduce the temptation of theft.
Checking Your Credit Report
In order to check your credit report, you need to request a copy of it from one of the credit bureaus or credit reporting agencies. There is usually some fee associated with this, though there are some companies that provide a copy of your credit report to you free of charge in exchange for you signing up for a credit monitoring service. Depending upon where you live, you might also be able to obtain a copy of your credit report free from certain government agencies once per year. Once you've received a copy of your report, you should take some time to go over it in order to get a feel for the unique layout of the credit report and to identify the various accounts that have been reported to the credit bureau.
Repairing I
ncorrect Information
You may find that some of the information contained within your credit report is inaccurate or wrong. You might even find accounts listed that don't belong to you. In either case, you should contact the credit bureau in writing to dispute the inaccuracies. They will investigate the validity of the claim and if they receive no response from the filing creditor or if they find that the information is actually incorrect, the credit bureau will remove the inaccuracy from your credit report which can help increase your credit score.
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