Personal Credit Report
Items in your personal credit report
A personal credit report differs from a business credit report (yes, even businesses have credit reports). Your personal credit report contains items that reflect your financial decisions as a person. Business credit reports are meant to reflect the transactions made in the name of businesses. For the most part, if you own a business, it is possible to keep these credit reports separately.
You personal credit report contains a wide variety of information that can be used by creditors, employers, insurance agents, lenders and others to determine whether or not you are trustworthy in terms of financial responsibility. Here are some of the items that appear on your credit report:
- Full name (and known aliases and variations)
- Social Security Number
- Spouse name and information
- Current address
- Previous addresses
- Credit and loan accounts
- Delinquent billing accounts (utilities, medical, etc.)
- Payment information on all of your accounts (late payments, missed payments, etc.)
- Tax liens
- Financial judgments against you
This information probably seems deeply personal to you, and it is. It is a record of all of the interactions you have ever had in terms of borrowing money, paying bills and earning an income. This information can then be used by a number of people and companies for a variety of purposes.
What is your personal credit report used for?
There are many uses for your personal credit report, most of them connected with others trying to figure out what kind of a risk you pose to their company. If you have a negative credit report, then you are considered a high risk – lenders may worry about your ability to repay a loan. If you credit report is positive, than you are a low risk threat, and you are more likely to get a loan or a good interest rate. Here is a look at how different entities use your credit report:
Banks, credit card companies and other lenders. The main use for your personal credit report is to provide people who are lending you money with an idea of how likely you are to make payments on time and in full. Banks, credit cards and other lenders (including for auto loans and retail loans) use the information to first decide whether or not you will get a loan. If they decide to let you have the loan, they next use your personal credit report to decide what kind of interest rate you will get. The better your credit report, the lower your interest rate.
Employers. If you are applying for a job – such as a security guard or someone who deals with money – that is sensitive in nature, some employers want to evaluate what kind of risk you pose. If your personal credit card shows that you have a poor financial situation, employers might worry that you will take a bribe or be a risk for embezzling from the company.
Insurance agents. Often, fiscal responsibility goes along with responsibility in other areas. Some insurance companies (especially auto insurance) look at your credit report to see if you are likely to be more responsible. A good credit report can result in lower insurance premiums.
Utility companies. Utility companies increasingly want to see if you are likely to make your bill payments on time. In order to get a general idea of this likelihood, utility companies may check your credit. You may have to pay a higher deposit if your credit report has a lot of negative information. Cable and satellite TV companies, as well as cell phone providers may also check your credit report.
Landlords. Many landlords are starting to use information in your personal credit report to decide whether or not to let you live as tenants. This is to reduce the chance that you will skip out the rent, or cause a collection problem every month.
When you have a good personal credit report, you are more likely to get the things that you need in life, and you are more likely to find a good deal when you are approved.
Related Article: What is a Credit Score? >>