All lenders need to be sure that you will repay the money that you are borrowing. To ascertain that you will pay the money back, they refer to the credit report. The first step to having a good credit score is to understand what credit report is and what components it comprises. Conceptually, the credit report reflects how you have borrowed in the past, and what your credit history has been like.
What is Your Credit Report?
The credit report is a record of your financial history and behavior. It includes details of all the loans you have and the repayments you have made.
These credit reports are maintained by credit bureaus such as Transunion, Experian and Equifax. The lenders can contact any one of these credit bureaus to check your credit report. However, the customer must authorize the lender to conduct this check, and it cannot be done by the lender without the permission of the applicant.
These credit checks are conducted when you apply for any of the following: credit card, home loan, personal loan, auto loan, etc. Based on the result of the credit check, the lender decides how to process your application. Every time a lender conducts a credit check, it is recorded on your credit report.
What Does Your Credit Report Show?
Your credit report contains the following information
- Details of all your credit. It shows the start date of the credit, credit amount, credit outstanding, tenure, etc.
- Details of all the payments that you have made for all the credit balances and if they were made on time.
- All the other applications you made for loans (including mortgage, credit cards and loans) with lenders.
- Your current and previous address as recorded by lenders when you had applied.
- Any written-off debt or settlements that you have had with the banks for non-payment of your dues.
Now that you know what is a credit report, you can learn more in detail about the factors that affect your credit score on mymoneykarma to help you have a good score.