What Is The Credit Report?

credit history or credit report is in many countries, a record of an individual or company's past borrowing and return, including information about late payments and bankruptcy. The term "credit reputation can be used for the same credit history or credit score.

In the U.S. where a customer makes a request for credit from a bank, store or credit card company, their information is forwarded to a credit bureau. The credit bureau matches the name, address and other identifying information of the credit applicant with information retained by the office of his files.That 's why it is very important for creditors, lenders and others to provide accurate data to credit bureaus. [1]

This information is used by lenders such as credit card companies to determine the creditworthiness of an individual, that is, to determine the individual will repay the debt. The willingness to pay the debt in time shows how the past has been paid to other lenders. Lenders expect consumer debt is paid monthly.

There has been much discussion of the accuracy of information contained in consumer reports. However, research studies that include only samples large enough to be valid generally concluded that the data in credit reports are very accurate. [2] [3] credit bureaus to identify their own investigation of 52 million credit reports emphasizing that data in the reports are very accurate. Consumer Data Industry Association testified before Congress less than two percent of these reports, which resulted in a consumer dispute had data deleted because it was a mistake. [4]

If a consumer disputes information in a credit report, credit bureau has 30 days to verify the data. Over 70 percent of consumer disputes are resolved within 14 days, then the consumer is informed of the decision. [4] Federal Trade Commission that a major credit bureau scores of 95 percent of those who disagree with an article seems satisfied with the outcome. [5]

The second factor in determining whether a lender will allow a consumer credit or loan is based on income. More income, ceteris paribus, the more credit the consumer can access. However, lenders make credit decisions based on both ability to repay a debt (income) and willingness (credit) as indicated in the previous payment history.

These factors help lenders extend credit when and under what conditions. Accepting the risk prices for almost all loans in the financial services sector, the report is even more important, because it is usually the only thing that lets you choose the annual percentage rate (APR), grace period and other contractual obligations of a credit card or loan.