How important is your credit report?
The answer to this question is that your credit report is very important. In fact, this seemingly insignificant file could affect many areas of your life quite profoundly, from whether you can get a car to whether you can get your own home. Your credit report keeps a log of your credit history, detailing your repayment patterns when it comes to paying bills and creditors. These reports are held and managed by agencies such as Experian and Equifax, and the reports are used by creditors to help them to decide whether you are a good or a bad risk when it comes to lending you money.
You should make a point of actually checking your credit report from time to time, and this is to ensure that the information on it is accurate. Human error can occur, and as a result you may find inaccurate information on your report – information that could be stopping you from getting credit. If you check your credit report and find that there are inaccuracies on there, you should contact the credit reference agency without delay, as these inaccuracies could be affecting your life.
Any late repayments or defaults on bill and loan repayments are logged against your credit report, as are timely repayments. This is how the credit report manages to give future lenders an idea of your borrowing and repayment patterns, enabling them to make a more informed decision with regards to whether to lend money to you. Every time you apply for a loan, this is also logged on your report, whether or not the loan was actually successful. If you are approved for a loan, this can help your credit rating in the event that is has previously been tarnished. However, credit refusals can leave a black mark against your report.
If you already have a tarnished credit history, or if you are currently struggling with repayments and think you may be heading that way, it is vital that you try not to miss payments or even make late repayments. This could immediately make your credit rating worse, making life even more difficult. Anyone struggling with their debts should take early action to avoid late repayments, defaults, and bankruptcy, as this could affect both your credit and your life for years to come.