If you want to take a loan to buy yourself a home or a car, or you want to buy insurance to protect your family and belongings against any sort of disaster, the most important thing that would be considered before approving your application is your credit report.

What a credit report is

A credit report is a document that contains detailed information of your credit history. It reflects your credibility by observing the payments you have made towards your debts. Prior to approving you for a loan, the lender will judge your creditworthiness from the report. It is also used by insurance companies and employers.

Contents of a credit report

A credit report includes every personal and financial details of your life. The things included in a credit report are:

• Your name and address (both present and past)
• Social security number
• Details about your spouse, if you are married
• Your employment history (both present and past)
• Number of credit accounts
• Number and types of loans taken by you and current outstanding balance in each
• Recent inquiries regarding your credit history, made by your creditors or employers for the past 2 years
• Bankruptcy, foreclosure or tax lien details (if applicable)
• If there is any late payments towards your mortgage or any other debt
• Your credit score
• Complete details of your credit and bank accounts

Credit reporting agencies

The CRAs or consumer reporting agencies collects and sells your information about your credit activities. The most common type of agency is the credit bureaus. The three major credit bureaus are Experian, Trans Union and Equifax. They take a charge in exchange of furnishing your credit information.

Types of credit report

Generally, a credit report is of 2 types. These are:

• Business credit report: This type of credit report gives the information of a business organization. The report contains a synopsis of the company’s business, to help the investors and creditors take important decision, in terms of investing in the organization or whether or not to provide credit to that organization.
• Annual credit report: This type of credit report is prepared by any of the 3 major credit bureaus. It gives a detailed credit history of a consumer. You can get a free copy of this report from any one of the bureaus every year. You can also get the report online by paying the required amount.

To all lenders, insurance companies and employers your credit report is the reflection of your financial capacity. So, you should check your credit report on a regular basis and if you find any discrepancy, you should immediately report about it and have it corrected. Your credit report is the mirror of your credibility, so you should take proper care to maintain it.