Credit Reporting Help

Credit score decides whether your offer for a loan would be accepted or rejected. There are few bureaus which cater to this. Some of the bureaus which specialize in this are Experian, Equifax and TransUnion. These bureaus draw out reports based on the credit score and submit it to the lenders. The lenders would then decide on further course of action. With a score of less than 650, your application would get rejected by the lender. Every credit score report also distinctly states the score reason, stating why your credit score has fallen so badly etc.

It is the responsibility of every individual to understand what is it that your credit report states and ensure the information available is up to date. There could be instances where your credit report does not reflect the payments effected by you. You need to set that right, by getting in touch with the right person. This is because if your credit score does not reflect the accurate data, then there are chances that your application for loan could be rejected outright, for no fault of yours.

There is always room for correcting your credit score. What you need to understand is that your credit score should be in tune with your income. Your credit score should not be less than your income. One needs to ensure that he clears the payments on time and before the due date. This would have a positive effect on your credit score, which would help you in the long run. Try and avoid partnership deals, where you would be signing as a co partner. The danger her is that in case your partner defaults payments, your credit score would be affected. The credit amount in your bank should be neither too low nor too high. If it is too high, then the lender would get an impression that you would lavishly splurge all the loan money. If it is too low, he would not get the confidence in you whether you would be able to disburse the loan amount.

Before sanctioning the loan, lenders normally check your financial records of the previous two years. One is advised to check one’s credit score and keep it on track. Ensure that your records are correct and free of ambiguity or errors. If there is an error, ensure its correctness before approaching the lender or a financier for a loan. Inaccuracy of your credit score results in your application getting rejected. There are still chances that your request for a loan is granted, but then you would have to shell quite an amount of money by way of interest charged by your lender, since he would have got the impression that you could default payments.

Companies like Equifax provide you with a credit report for a fee. Individuals should ensure that your report is updated and free of errors. These bureaus provide reports twice in a year. They would also warn you regarding the expiry of your credit limit. You could get these reports absolutely free as per the Federal law provisions.

One needs to ensure that the credit report is set right. Ensure that you approach the right bureau. There are cheats and frauds in this line of business who might promise to set straight your credit reports by now showing your late payments etc. try and avoid such bureaus. Such non professional bureaus are after your money. Try and beware of such manipulators.

Free Credit Report

Why is it that so much of importance is given to credit rating of a person? Many people are not even aware of their credit rating, till the time they have to approach the bank or a lender for a loan. A person with a good credit rating stands to benefit in the sense that they can avail loan facility with minimum interest rate as compared to a person who does not have a good credit rating. This could add a few extra dollars to your bank account, since you would have saved a considerable amount of money by saving this extra amount, which you would have otherwise paid to the bank or the lender. It is noted that lenders, banks and financial institutions respect you based on your credit rating. In case a person has a reasonably good credit rating, he is definitely preferred and valued above customers with a low credit rating. Now how is this achieved? People with a reasonably good credit rating are the ones, who would not have deferred payments, have taken care of their finances pretty well, have not defaulted vendors and clients etc.

Credit report and how you can have it?

A credit report is basically similar to that of a balance sheet. It gives a brief idea about your assets and liabilities. The assets imply the cash balance, the value of your property, land etc. The liabilities include the amount you owe your debtors, loan amounts to be disbursed. There are bureaus which generate these reports so as to enable you to have a fair understanding of your credit standing.

Some of the bureaus connected with these services are Experian, Equifax and transunion. These bureaus normally send reports at least twice a year enabling you to know about the credit worthiness.

FICO score:

Now how does one arrive at the FICO score? A FICO score enables a lender to understand your credit worthiness. It gives him an idea about your ability in disbursing the loan amount. FICO score normally ranges from 300 to 850 score. The higher your score is, the better is your credit worthiness. The better are the chances for you for the future. This FICO score does not appear in your credit report. You need to shell out some money to any of the 3 bureaus mentioned above. They would go through your reports and enable you to find out the FICO score. In case you do not find out your FICO score, your lender would ensure that he find out your score, before sanctioning your loan.

Your FICO score also decides the interest rate. Let us take for example Mr.A’s FICO score is 700 pts and Mr.B’s FICO score is 850 pts, assuming both of them are sanctioned the loan, the interest charged for Mr. A would be greater than the interest charged for Mr.B. This is because Mr.B has a superb FICO score.

FICO score is the deciding factor not only for the loan amount but also the interest charged on that loan.

What’s next once you have got your credit report?

Ensure that your credit report is absolutely free of errors. There could be entries in your credit report which would state incorrect facts like defaulted payments, late loan installments. Ensure that you set everything right. There could also be mention of credit cards, which are not owned by you. Ensure that your credit report is as transparent as it can be to ensure your credit rating.