An annual credit report is a summary of information like bank balances, monthly bills and other accounts of the consumer regarding to that current year. It's of importance to both the consumer and other parties with whom he might be financially involved.
A yearly credit report is useful when applying for an insurance policies and credit transactions. An insurer wants to be sure that the insured will make good his regular premiums without fail. Thus, without a good report, it might prove very hard to convince an insurance company give out the policy.
When applying for employment, most employers will ask for the person's credit report in order to find out whether the prospective employee is financially prudent and thus can be entrusted with employer's finances. In other instances, house owners will ask for a copy of the credit report before letting out their apartment or flats. They want to be assured that the tenant can pay for his monthly rent amount and on time.
An annual credit report is one of the requirements needed by credit card issuing companies before deciding to take the person as a client. Bankruptcy is an issue of concern to the credit card firms and have to be sure that the applicant is financially responsible and is not tempted to spend more than he can afford.
In order to get a mortgage or a loan from any housing corporation or financial institution, they will normally request for the applicant's credit files. A positive report means that the person knows how to manage his finances and will therefore be able to repay his debts on time. The financial institutions are interested in knowing if the applicant is able to handle his monthly bills and thus monthly interest charges on the loan or mortgage.
A yearly credit report is a planning tool for the consumer. Recommendations made on the report can help in making better and sound financial decisions. For instance, a person who has a negative in his or her report will try finding ways to fix it in order to make him / her more credit worthy.