A Credit Report is a statement about how well you have managed the credit that you have. But, to understand what it is, it’s helpful to understand what it’s not.
Understand What a Credit Report Is Not
Your Credit Report is not a Statement about what you have. It is in no way a reflection on how much money you have in the bank. For example, it doesn’t even take your income into account.
Silly- Yes. But a Credit Report tries to determine for lenders, whether rich or poor, if this person has (or has not) managed their borrowing well.
Your Credit Score is based off Information in your Credit Report
This is important because your Credit Score can mean the difference between a great mortgage rate and a terrible one (which amounts to a lot of dollars).
However, you cannot get your credit score for free. You have to pay for that. In fact, it wasn’t until only recently that Credit Reports have become available for free.
Snoop Detection
Everyone who looks at your Credit Report is listed in your Credit Report. Usually this is people from whom you’ve requested a loan- such as credit card companies.
Non-Financial Reasons to Keep Your Credit Report Clean
More and more, employers are requesting copies of your credit score. While they do not have access to it without your permission- failure to comply could create some reason for them to doubt your financial health. For more read MSN’s: How bad credit can cost you a job.
Additionally, some Law Schools will ask for a sign-off to check your Credit Report. This is part of their “character check”. Feels a little extreme, but it’s the world we are living in.
