One of your most vital documents is your credit report. It contains detailed information about your credit history, including identifying personal data, credit accounts, loans incurred, late payments, and almost everything else about your finances.
Your credit report, depending on its information, can either benefit you or create problems for you, especially if you are applying for a car or a home mortgage loan. After all, your credit report is the major defying factor of your creditworthiness.
How Important Is Your Credit Report?
If you need convincing that your credit report is key to financial success, let us give you an example situation. Say that you're ready to quit your corporate job and start your own business. You have the knowledge and skills to succeed, but you need a loan or a line of credit in order to gain funding for your project.
Before any lenders would give you a loan or a credit account, they would first check your creditworthiness to determine whether they can trust you to repay. The first thing they would do is check your credit report to see if you have any histories of bankruptcies, unpaid debts, late payments and so on. If you do not have a good credit history, no lender would do business with you.
This fact situation is the same if you apply for a car loan or a home mortgage loan. Even renting an apartment can become a difficult process if your report is unfavorable. Some firms may even decide not to hire you because your credit report does not project a good financial image of you.
What Should You Do To Keep Your Credit Report Favorable?
Since your credit report being key to your financial reputation, keep it as clean and favorable as possible. There are two important actions you must take to do this. First, always pay your bills on time. Secondly, your credit card debt should be no more than 30% of your credit limit. So, if you have a credit card with a credit limit of $20,000, the debt on that card should not be more than $6,000.
Review your credit report at least once a year and if you believe that it contains errors that are unfavorable to you, exhaust all means to correct the report. Sometimes errors are innocent technical mistakes made by lenders, but sometimes they result from something much more serious, such as people stealing your credit identity. In all cases of error, contact the credit bureaus immediately and also contact the source of any errors on your report.
Your credit report is very important to your financial success. Protect it just as you protect your passport, birth certificate, and other personal legal documents.
Your credit report, depending on its information, can either benefit you or create problems for you, especially if you are applying for a car or a home mortgage loan. After all, your credit report is the major defying factor of your creditworthiness.
How Important Is Your Credit Report?
If you need convincing that your credit report is key to financial success, let us give you an example situation. Say that you're ready to quit your corporate job and start your own business. You have the knowledge and skills to succeed, but you need a loan or a line of credit in order to gain funding for your project.
Before any lenders would give you a loan or a credit account, they would first check your creditworthiness to determine whether they can trust you to repay. The first thing they would do is check your credit report to see if you have any histories of bankruptcies, unpaid debts, late payments and so on. If you do not have a good credit history, no lender would do business with you.
This fact situation is the same if you apply for a car loan or a home mortgage loan. Even renting an apartment can become a difficult process if your report is unfavorable. Some firms may even decide not to hire you because your credit report does not project a good financial image of you.
What Should You Do To Keep Your Credit Report Favorable?
Since your credit report being key to your financial reputation, keep it as clean and favorable as possible. There are two important actions you must take to do this. First, always pay your bills on time. Secondly, your credit card debt should be no more than 30% of your credit limit. So, if you have a credit card with a credit limit of $20,000, the debt on that card should not be more than $6,000.
Review your credit report at least once a year and if you believe that it contains errors that are unfavorable to you, exhaust all means to correct the report. Sometimes errors are innocent technical mistakes made by lenders, but sometimes they result from something much more serious, such as people stealing your credit identity. In all cases of error, contact the credit bureaus immediately and also contact the source of any errors on your report.
Your credit report is very important to your financial success. Protect it just as you protect your passport, birth certificate, and other personal legal documents.