Understanding Your Credit Report
At some point in your life, you might’ve wondered how your credit report impacts all your loan applications. When you are applying for a loan, it is essential to fully understand how your credit report works. And what can you do to use it to your advantage when anticipating for loan approval. Generally, lenders look at every angle in your credit report and what they find out will impact the result of your application.
In the simplest sense, a credit report is a person’s creditor history gathered in a single report. It facilitates your credit score and it is designed in a way that allows creditors and lenders to instantly determine your creditworthiness. If you ever applied for a home loan, credit card, personal finance, electricity, gas, or mobile phone contract, you already have an existing credit report on one of the many credit reporting agencies.
Credit Reporting Agency
A credit reporting agency is considered a company that gathers and keeps a person’s credit details. Creditors and lenders utilize these details to examine someone’s credit history. The vision of credit reporting agencies is to make sure that they have sufficient information to assist the lenders in making intelligent decisions.
Loan Application and Credit Check
If you apply for a cash loan from a lender, multiple consent forms and different information will be collected during the application process. The lender will ask for your complete name, birth date, gender, residential address, driver’s license, and employer information. All of these will guarantee that they have sufficient information to precisely examine your credit report. It is very important that you provide the appropriate information when applying for loans or credit since this will greatly help make application procedure seamless and fast.
The Information Lenders Examine on Your Credit Report
When a lender asks for a credit report from the credit reporting agency of their choice, there are different information that they examine to help them decide the outcome of your application. The first two things that they look at are your credit report and credit score. These are the two most important information on your report. You score will tell them your repayment capacity. In the lender’s point of view, the higher the score, the more likely you can repay the loan. The age of your credit report is another vital information that will make the lender trust you. For them, the older the credit report without any major problems, the better it is. Other than these two, the lenders will also examine other aspects of your credit report like past addresses, enquiries, defaults, court actions, bankruptcy, and business transactions. This information will impact your credit score and allow the lender to clearly see your financial history.
Improving Your Credit Score: Things to Avoid
If you badly wanted to increase your credit score, you should know what things to avoid and stop doing. The thing about your credit score is more does not necessarily mean better. Information such as the amount you plan to borrow and enquiries impact your credit score. When you know how much money you need, stick to it and don’t take more than that. When you apply for a bigger amount than what you need, it will affect your credit score – and not in a good way. Moreover, if unforeseen expense appears and you have no other resort than to apply for unexpected bills loan or emergency cash loans, avoid applying from numerous lenders simultaneously. Multiple enquires over a short amount of time will negatively impact your credit report and give the lenders the impression that you are desperate for money.
To take care of your credit score, limit your loan application to one lender and wait for the outcome first before you apply from a different lender. In addition, you should also prevent default listings to show up on your credit report. The best way to do it is to completely avoid it. If you happen to default on a certain lender, electricity companies or telco company, they can record a default listing on your credit report. The majority of these companies will hire a hardships team to help customers look for manageable solutions to repay what they owe to the company before recording it on your credit report. Reach out to your lenders and find a good solution to avoid default listing.
Free Credit Report
If you are a consumer, you are eligible for one free credit report every year. But if you want an instant credit check, you might be asked to pay. But, if you don’t mind waiting for 10 days, you can access your credit score check online. All you need to do is to reach out to any of the major credit reporting agencies. They will ask you to give your complete name, residential address, birth date, driver’s license number, and past address.
Many people, when they consider a payday loan, are afraid to do so thinking they will not qualify for a loan because of a bad prior history of borrowing. If you have a bad credit history, we encourage you to apply for a no credit check loan from us today.
Why It Pays to Check your Credit Report
It pays to know the information record on your credit report. There’s nothing wrong with knowing and it will enable you to change your borrowing habits – if there’s something that’s needed to be changed. Examining your credit report will also inform you of any inaccurate listings that might be due to identity theft. All in all, here are several things that you should watch out for in your credit report:
- A debt that’s been recorded twice
- Incorrect name or birth date
- Old address
- Inaccurate debt amount
Basically, checking your credit report will help you determine if you have weak credit and what kind of loan you may be qualified for. Once you find inaccurate information on your credit report, make sure you fix it as soon as possible. So, how do you fix it? You can contact the information provider and credit reporting agency since it’s both their responsibility to fix any incorrect details. However, you also needed to inform them of the wrong info. Tell them the facts and collect any documentation that will support your claims and mail or email it to the two providers.