A credit report is very similar to a report card, but instead of performance ratings or grades, it reports a person’s creditworthiness as it outlines credit information and payment history.
Thus a credit report is an invaluable tool for creditors in gauging the payment capability of a debtor or borrower whether he has the capability to pay a loan. A person’s credit score will determine whether to approve a credit application and how much interest rates will be charged.
To get the best deal, it is a must to fix bad credit report since even your landlord, prospective employer or insurance provider may check your credit report. So make sure that what they see in your credit report will convince them to approve your credit or loan application.
Credit counselors and experts advise people to secure a copy of their credit report from consumer reporting companies or credit bureaus and update the information in it to correct erroneous or inaccurate items. These items can be disputed by sending a letter to any of the three consumer reporting companies Equifax, Experian or TransUnion, which will then investigate the matter.
Credit bureaus have an obligation under the Federal Fair Credit Reporting Act to ensure that the information they have about the creditor is accurate and fair. Individuals are also entitled to numerous rights such as to the right to get a free copy of the report, to know if victimized by identity theft, to find out if anyone has filed an action based on information in the credit report among others.