A credit report contains information about money you have borrowed and recurring payments. There are three main credit bureaus that collect credit information: Equifax, Experian and Transunion. These agencies maintain up-to-date information on car loans, student loans, credit cards and any accounts that go into collections. Your credit report is an important document that you must be aware of and check on regularly to maintain good credit. Your credit report is used to determine your overall credit score. Your credit score can range between 300 and 780. Most people have scores somewhere between 650 and 700. There is a smaller amount of people who have very low scores (below 600) and very high scores (above 750).
Benefits of a Credit Report
Your credit report is pulled every time you want to open a credit card, apply for a personal loan, buy a car or purchase a home. Your credit report (and the information it includes) can greatly benefit you if you use your credit responsibly. You can receive low interest rates on loans and gain a higher credit limit if lenders see that, over time, you make your payments on time and have enough open accounts to show that you know how to manage credit.
How to Use Your Credit Report
Many people believe that not having any credit is good. However, not having enough information in your credit report could prevent you from gaining a loan or being able to purchase an expensive item. It is a great idea to have a few open accounts that you maintain by being aware of your payment dates and paying bills on time. Additionally, check your report at least every three months to be sure that you do not have inaccurate information on your report. If you find a mistake on your report, you can alert the credit bureau to make a change by filing a dispute.