Your Credit Report
Your Credit Report
What It Says about You
Most people finance their homes with mortgages and pay for their cars with loans. Young people often obtain
loans to pay for college. And, of course, lots of people make purchases with credit cards.
You can’t expect to receive credit as a matter of course, however. You must apply for it. And just as you would
hesitate to lend money to a stranger, banks, retailers, or finance companies will not grant you credit without
knowing something about you.
It used to be that a retailer or bank would have to call each creditor you listed on an application form before
they would decide to extend credit to you. Today, they rely on credit reports, so it’s important for you to know
what is in yours.
What Is a Credit Report?
A credit report is a record of your credit activities. It lists any credit-card accounts or loans you may have, the
balances, and how regularly you make your payments. It also shows if any action has been taken against you
because of unpaid bills.
Where Do Credit Reports Come from?
A company that gathers and sells credit information is called a consumer reporting agency (CRA). These types
of companies collect information about your credit activities, store it in giant databases, and charge a fee for
supplying the information. The most common type of CRA is the credit bureau.
There are three major credit bureaus that operate nationwide, plus many smaller companies serving local mar-
What Is a Credit Rating?
Your credit rating is drawn from your credit report, which outlines your borrowing, charging, and repayment
activities. A good rating helps you reach financial goals; a poor rating limits your financial opportunities.
Since your credit report influences whether you are able to buy a home and get a job, it is extremely important
to protect your credit rating by making loan and bill payments on time and by not taking on more debt than
you can handle.
Who Is Allowed to See Your Credit Report?
Credit bureaus c