Finance and Credit Professional

You almost certainly know only too well that the information which is contained in your credit report is used by the loan and credit card companies when determining whether or not to extend you credit, but do you know what information your credit report contains? For instance, did you know that the information which are contained in your personal credit report could affect whether or not you can buy a new house or are going to need to remain in your current 'shoebox'?

In many cases people think that when a company looks at your credit report they are simply looking to see your credit score and, while this is certainly one thing that they do look at, they are in fact looking at much more. Most especially, lenders are looking at how much debt you have compared to your income and even quite small accounts, such as those with a mail order company, will be considered as a deduction from your income when considering a loan application.

If a lender considers that you have got more money going out than you have coming in then your application will automatically be reject. Indeed, by law a specified percentage of your income must be available to meet loan payments before the lender is allowed to approve it, regardless of the purpose of the loan.

Lenders will also be looking back at your credit history over the last seven years to see how you have managed any loans during that period. In particular, they will look to see if you have made your payments on time and will take note of any payments which you made more than thirty days late. It may not have seemed particularly important to you when you ran into a few problems and were late with your payments for several months on one of your accounts, but a lender will certainly consider this when determining the risk of lending to you now.

Lenders is also going to look to see if any of your accounts have run into debt during the last seven years and whether or not these debts have now been paid off. If you have outstanding payments on a current agreement lenders will be very wary when it comes to giving you additional credit until these are cleared.

Finally, your personal credit report will show whether you have filed for personal bankruptcy, usually in the previous ten years. A few people believe that a company is far more likely to lend to you if you have filed for bankruptcy because they have the added protection of knowing that you are not permitted to file again for several years. This however is not true and filing for personal bankruptcy is seen by lenders as a red flag indicating that you have already shown a tendency for getting yourself in over your head when it comes to managing your finances.

Your credit report is an extremely important document that you ought not only to understand but which you should review occasionally for your own protection and peace of mind. Luckily, the law requires that you be sent a copy of your personal credit report once every year upon request and the first thing you ought to acquaint yourself with is how to obtain your free annual credit report. Once you have received your report you then have to study it carefully to make sure that it is accurate and to request that it be amended if it is not. Additionally, there are certain instances in which you can request alterations to your report, even when it is accurate, and here you need to have the answers to hand for questions like how can I remove a judgment from my credit report?

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