How Much Do You Know About Your Personal Credit Report?

You probably know all too well that the information which is contained in your credit report is used by the credit card and finance companies when considering whether or not to extend you credit, but do you know just what information your credit report contains? Did you know for instance that the information which are contained in your credit report could influence whether or not you are able to buy a new home or are going to need to stay in your current 'shoebox'?

In many cases people think that if a company looks at your personal credit report they are just looking to see your credit score and, although this is definitely one of the things that they do look at, they are in fact looking at a great deal more. In particular, lenders are looking to see the amount of debt you have in comparison to your income and even fairly small accounts, such as those with a mail order catalogue company, will be treated as an income deduction when considering a loan application.

If a credit card company or other lender decides that you have more money going out than you have coming in then your request will automatically be turned down. In fact, the law requires that a certain percentage of your income has to be available to meet the payments on a loan before the lender can approve it, whatever the reason for the loan.

Lenders are also looking back at your credit history for the last seven years to see how well you have managed loans in existence during that period. Specifically, they are looking to see if you have made payments on time and will take note of any payments that you made more than thirty days late. It might not have seemed especially important to you at the time that you ran into a few problems and were late making payments for several months on one of your accounts, however a new lender is certainly going to consider this when determining the risk of lending to you now.

A lender is also going to look to see whether any of your accounts have run into debt during the past seven years and whether these debts have now been cleared. If there are payments outstanding on a current agreement lenders will be very wary about extending you additional credit until these are paid off.

Finally, your personal credit report will also show if you have filed for personal bankruptcy, in most cases within the last ten years. A few people think that a company is more likely to advance you credit if you have filed for bankruptcy as they enjoy the protection of knowing that you are not able to file again for several years. However, this is not the case and filing for bankruptcy is viewed as a warning flag by the finance and credit card companies showing that you have already shown a tendency to get yourself in over your head when it comes to handling your money.

Your personal credit report is a very important document which you ought not only to understand but that you ought to review from time to time for your own protection. Happily, the law requires that you be provided with a copy of your personal credit report once every year on request and so the first thing you should acquaint yourself with is how to obtain your free annual credit report. Having received your report you then have to look through it with care to ensure that it is accurate and then to ask for it to be amended if it is not. Also, there are certain instances in which you can ask for alterations to your credit report, even if it is accurate, and here you will have to have the answers to hand for questions like how can I remove a judgment from my credit report?