When it comes to getting a car loan or mortgage, your reputation comes before you. Your credit report gives banks and lenders a good idea of whether you are a good candidate. Using the information, they contain and your financial history, they can assess the likelihood that you will repay the money they gave you.
Although most people today know their credit score, this number is a composite of many other data points from your past activities. It can tell immediately how strong your position may be, but it alone doesn’t tell the whole story.
It can be important to understand everything about your credit report for a number of reasons. Not only will this give you a more detailed look at how creditors see you, but it can also give you tips on how to make better decisions about how to spend your money.
Your credit report shows the history of your credit cards, loans, and bills and how you did or did not pay them. For example, you might think you’re in good standing, but a late payment could come back and haunt you when you want to buy a new car or rent an apartment. Seeing this on your report may give you an opportunity to correct any deficiencies and improve your score.
It is impossible to hide your financial life from lenders. Everyone should be aware of what their credit report says about them and understand the implications. For more information, see the following infographic.
This infographic was created by Stein Saks, credit reporting errors