As we have seen in last few articles, that a credit report is of utmost importance the moment you apply for a credit card, or you want to take a loan, or you want to apply for a mortgage loan. The companies offering you the credit card or loan or mortgage then do a background check and go though your Credit Report, before deciding whether they should offer you a loan or not. Hence, the
Credit Score Report becomes very important for individuals to maintain a good
Credit History or
Credit Record.
Let's start with the basics:
What is a Credit Score Report?A
Credit Score Report is a summarized record of your financial borrowings or credit activities which you may have carried out in the past. As per Wikipedia, A
Credit Score is a numerical expression based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person, which is the perceived likelihood that the person will pay debts in a timely manner. A credit score is primarily based on credit report information, typically sourced from credit bureaus / credit reference agencies.
What is listed in the Credit Score Report regarding the credit history?The Credit Score Report lists all the details about any credit-card accounts or loans you may have, the corresponding outstanding balances, and similar transaction details. The Credit Score Report also may include details if any action has been taken against you because of unpaid bills or you missing out making a term payment for your mortgage or loan. Most important, your credit report contains your credit card, mortgage and loan payment history.
What personal information is listed in the Credit Score Report?The Credit Score Report also includes personal information like name, address, date of birth, and Social Security Number. It also includes previous addresses, current and previous employers, and public records like bankruptcies, liens, or judgments.
How should one maintain a good credit record?In simple steps, you should never default or delay on any of the payments. Always maintain good rapport with the financial companies like banks and mortgage lenders and credit card companies. Always make your payments on time. It is advisable to maintain good rapport with the employers as well, as in some countries, the Credit Score Report contains details about your employer and your loan offering company may just call up your employer to verify your credentials with them.
How frequently the Credit Score Report changes?Your
Credit Score Report will change with each financial transaction or activity that you perform on the debt side. This may include payment of credit card bills, mortgage repayment and other loan payments.
Are there any services to offer Free Credit Score Report?There may be a few organization which claim to offer free Credit Score Report, one report per year. But one should be careful because they may later charge you for signup or other account setup fee. In the so called FREE Credit Score Report, you may only see a very fine summary of the Credit Score Report. If you want to ask for details, then you will be asked to pay for.
Is it required to check the Credit Score Report often?YES. It is definitely a must to check your Credit Score Report atleast once a year. The reason is that in some countries, there may be multiple credit rating agencies, and each agency may rate you differently. Hence, to be clear about your credit rating standings, it is always good to know about the Credit Score Reports.
Also, there may be cases of identity theft, where without your knowledge, someone else may be carrying on financial transactions in your name. This may include taking loan in your name and not making a repayment. Ultimately, it will be you whose rating will be affected. Hence it is important for you to keep checking your credit rating periodically.
What are the best ways to check Credit Score Report?Depending upon the country of your residence, you can opt for checking the Credit Score Report.
In case of USA, you can get your respective US Credit Score Report from one of the three major credit bureaus: Experian, TransUnion, and Equifax.
Americans are entitled to one free credit report within a 12-month period from each of the three agencies. The three credit bureaus run a website, where users can get their free credit report, normally without credit scores. Credit scores are available as an add-on feature of the report, for a fee.
In UK, there are 3 agencies which you can approach for UK Credit Score Rating - They are
Experian, Equifax & CallcreditIn Canada, there are again 3 agencies for Canada Credit Score Rating - Equifax, TransUnion, and North Credit Bureaus (an Experian company)
