A Quick Guide To Credit Reports

A credit report is basically a consolidated account of your previous borrowings and repayments. Every time you borrow, pay or delay, the details are added to your credit report. Lenders use it as a barometer of how likely you are to pay back any money lent to you.

Credit reports work through issuing a credit score. They will calculate your borrowings and repayments against the how long it took you to repay and come up with a score of between 300 and 850.

The higher it is, the more financially stable you are considered to be. It means that you are good for a loan, a credit card or a mortgage. If it’s low, it means that your application for borrowing is unlikely to be accepted.

If your credit score is over 700, you are considered to be in excellent credit health. If you are below 600, then you are considered a ‘high risk’, and you should look to improve your credit score by paying off some of your debts.

Now, lets look in more detail at some of the reasons why it’s important to have a good credit score…

– Once you have gotten yourself a healthy credit score, it means easier access to more finances. This could be a store card, bank loan or a car. Today, it’s almost impossible to mortgage a house with a bad credit score.

– If your credit score is favorable, you’re seen as a reliable person who pays back what you borrow. This encourages vendors to give you better deals. You may find yourself getting longer repayment periods or healthy discounts.

– When applying for a new job, employers may run a credit check on you. Applicants with the best credit scores are in an advantageous position, as they are considered to more honest and reliable.

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