Lending companies are in the business of trust. If they find you trustworthy, your request for a loan will be granted. However, as you may know, gaining someone's trust can take a very long time. People need to know enough information about you in order to judge if you are worthy of trust. Because of this, credit companies today make use of your online credit report to know whether or not you are creditworthy.
Who decides? Well, you do, actually. Your online credit report records every type of credit you have -loans, credit card transactions, and unpaid bill among others. You actually build up your credit report. This is the reason why it is so important to maintain a good credit standing from the first time you borrow money. Make sure that you pay your obligations on time.
Your report is compiled and consolidated by government-approved companies called credit bureaus. These companies are contacted by lending institutions if you should apply for a loan. The lending company asks the bureau for your credit records. The bureau then compiles this record by checking out your financial footprints. After the report is compiled and sent to the lending institution, it is then used to judge your creditworthiness.
There are certain instances when mistakes are made on the report. It falls upon you to rectify those errors and make sure of the accuracy of the report. In order to do this, you need a copy of the report. You can get one easily through the internet. It would only cost you a few bucks and you would be getting it instantly.
When you get the report, you would best scrutinize it carefully. You need to make sure of every doubtful piece of information. This means that you should cross-check every debt and every payment with what you have on your own records.
If you have found an error, you should get proof and then try to correct that error by presenting your proof to the credit bureau. You should also make sure that there are others who will attest to the erroneous nature of the credit report.
Rectifying those errors is important, as your credit report affects your getting a loan by a lot. First of all, your report determines whether or not you will be granted as loan. Credit companies use your report in order to determine what is called your credit score-the risk of you defaulting on a loan. If the score is low, then your application will be denied. Your average American is actually able to maintain that score between 600 to 800 points.
Of course, if you have a high score, this brings about a whole new possibility for you. Credit company standards often dictate that if you have a credit score of 720 or above, you will be able to get the loan almost instantaneously. If you manage to raise this score to 750, you are entitled to get a lower interest rate. This is quite the benefit, right?
Actually, in the past, only lenders were allowed to view your credit report. This system was monumentally unfair as the information contained there was yours, right? Today, however, you can easily get your hands on your report and make sure that everything is as it should be.
You should also be wary as to who you get your report from. A lot of phony companies out there would only take your cash and provide you with a report that's about as reliable as the existence of the Loch Ness monster. There are only three national credit bureaus and these are the institutions you must approach in order to get accurate information: Experian, Equifax, and TransUnion. Remember these names.
Going directly to the websites of these three companies will allow you to view your online credit report free of charge. Although there are a lot of companies and websites out there who charge for the service, it would be best to avoid them. They may try to seduce you by offering you variations of the benefits that you can get from them, but you need to examine them thoroughly before you actually avail of their services. There are various conveniences that you may get from selecting the right agency, but the risk might not be worth it.