Welcome to Credit Report resource site!

Credit report or credit history is a record of an individual's or company's past borrowing and repaying, including information about late payments and bankruptcy. This information is used by lenders such as credit card companies to determine an individual's or entity's means and willingness to repay an indebtedness.

Credit Report

What is a credit report

In many countries credit report is a record of an individual's or company's past borrowing and repaying, including information about late payments and bankruptcy.

When a customer fills out an application for credit from a bank, store or credit card company, his or her information is forwarded to a credit bureau, along with constant updates on the status of his or her credit accounts, address or any other changes you may have made since the last time he or she applied for any credit.

This information is used by lenders such as credit card companies to determine an individual's or entity's means and willingness to repay an indebtedness. This helps determine whether to extend credit, and on what terms. With the adoption of risk-based pricing on almost all lending in the financial services industry, this report has become even more important since it is usually the sole element used to choose the annual percentage rate (APR).

A credit report includes information on where you live, how you pay your bills, and whether you’ve been sued, arrested, or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

How credit rating is determined

Credit ratings are determined differently in each country, but the factors are similar, and may include:

Payment record: A record of bills being overdue will lower the credit rating.
Control of debt: Lenders want to see that borrowers are not living beyond their means. Experts estimate that non-mortgage credit payments each month should not exceed more than 15 percent of the borrower's after tax income.
Signs of responsibility and stability: Lenders perceive things such as longevity in the borrower's home and job (at least two years) as signs of stability. Having a respected profession can improve a credit rating.
Re-Aging: Through re-aging, a credit history is re-written and you are given a fresh start on that particular account. This can dramatically improve the credit score.
Credit cards that are not used: Although it is believed that having too many credit cards can have an adverse effect on a credit score, closing these lines of credit will not improve your score. The credit rating formula looks at the difference between the amount of credit a person has and the amount being used, so closing one or more accounts will reduce your total available credit. This in turn lowers the percentage of available credit, and the credit score will drop. The credit formula also factors in the length of time credit accounts have been open, so closing an account with several years of history is another avoidable credit mistake.
Credit inquiries: An inquiry is a notation on a credit history file.