You doubtless know all too well that the information in your credit report is used by the loan and credit card companies when considering whether to extend credit to you, but do you know just what is actually in your credit report? Did you know for instance that the details contained in your credit report could determine whether or not you can buy a new house or are going to need to stay in your present ’shoebox’?

A lot ofIn a lot of cases people think that when a lender looks at your personal credit report that company is simply looking at your credit score and, although this is unquestionably one thing that they do look at, they are also looking at far more. In particular, they are looking to see the amount of debt you have in comparison to your income and even relatively small accounts, such as those with a mail order company, will be treated as a deduction from your income when considering a loan application.

If a credit card company or other lender concludes that you have more money going out than you have coming in then your application will automatically be reject. In fact, the law requires that a certain percentage of your income must be available to meet the payments on a loan before the lender is allowed to approve it, regardless of the reason for the loan.

Lenders are also looking back at your credit history for the past seven years to see how you have handled loans in existence during that period. Specifically, they are looking to see if you have made payments on time and will play close attention to any payments that were more than thirty days late. It might not have seemed especially important to you when you got into difficulty and were late with your payments for a few months on one of your accounts, however any lender will certainly take this into account when determining the risk of lending to you now.

Lenders will also look to see whether any of your accounts have run into debt during the last seven years and if these debts have now been paid. If there are outstanding payments on an existing loan agreement lenders will be very wary about extending you further credit until these are paid off.

Finally, your credit report will also show whether you have filed for personal bankruptcy, normally within the previous ten years. Some people believe that a lender is much more likely to advance you credit if you have filed for bankruptcy because they enjoy the protection of knowing that you may not file again for several years. This however is not true and filing for personal bankruptcy is viewed as a red flag by the credit card and finance companies indicating that you have already shown a tendency to get yourself in over your head when it comes to managing your finances.

Your personal credit report is an extremely important document and one which you should not only understand but that you ought to review occasionally for your own protection and peace of mind. Happily, the law requires that you be furnished with a copy of your credit report once every year upon request and so the first thing that you should acquaint yourself with is how to obtain your free annual credit report. Once you have got your report you then need to study it carefully to make sure that it is accurate and then to request that it be amended if it is not. Additionally, there are some instances in which you can request alterations to your personal credit report, even if it is correct, and here you need to have the answers to hand for questions like how can I remove a judgment from my credit report?