Your credit score report will always be on file in a credit bureau if you have been sanctioned a loan or any line of credit. The credit bureaus will monitor and maintain the information about the borrowing habits and the repayment practices in a credit score report with full details. This credit score report will contain information like your personal details, your credit history and your public records with a list of all creditors that you may have authorized to have an access to your information. The main idea behind the credit score report is to maintain an objective credit rating for you.
What is a Credit Score Report?
A credit score report is an assessment of how you can be depended upon when you repay your debts. Your credit rating can actually be ascertained by yourself and not the financial institutions. You will be automatically reported to a credit bureau if you fail to pay your bills on a timely basis or when you neglect to repay loans. The private companies or credit bureaus exchange this information on how the borrowers are paying their bills. The information is later used to assess the individual credit worthiness. Credit is one of your most important personal assets. It can have an impact on your financial health and can damage your ability to borrow in life if you do not manage your credit properly from a young age.
A credit score is a three-digit figure that denotes your credit risk at any given time. The credit report bureaus use a scale from 300 to 850. When you maintain a higher credit score, you will be a low risk for the creditors. An ‘R’ rating is also part of your credit score report. This is calculated as per the lenders’ report on your payment history and it will range from 1 to 9. An R1 rating is the highest and R9 is the worst. The factors that have an impact on your credit score report are your payment history, the amount of debts, the usage of credit, new credit lines’ acquisition and types of credit used.
How do you find out what your rating is on the Credit Score Report?
You are entitled as per the federal law to check the information in the credit bureau file. You can access it by visiting the website, www.annualcreditreport.com. A good credit score rating is anything that is above 720. A high credit rating like this can reduce your cost of borrowing considerably by extending you a lower interest rate.
Your credit score is essentially based on the credit report information that will be sourced from the credit bureaus. This credit score is used by the lenders to establish who can qualify for a loan and at what rate of interest. The credit score also hints at the types of clients who are more likely to bring in revenue and profits to the creditors.
What is in a Credit Score Report?
There is much information on your loans that you have entered into in the past six years. The detail will tell about whether you paid regularly and on time and how much is the amount owed. It will also tell about the credit limit on each account with a list of creditors who have been authorized by you to access your files.
Your accounts will include a symbol involving a letter and a number. The ‘R’ will refer to a revolving account and ‘I’ will stand for an installment account. The numbers will be from 0 to 9. 0 will be an account which is too new to be rated while a 9 will denote bankruptcy or bad debt. For an account which is of the revolving kind, R1 is the highest rating. It specifies that you pay your bills within time. Any company that is considering giving you credit can get a copy of your credit score report.