It will tell you where you owe money, how much you owe, and how you pay (on time, 30 days late, etc.). All of that information is compiled together and then analyzed.
After the analysis, a number is assigned to you as to what your credit fitness level is. Potential creditors then look at your credit score and decide if you are going to be able to pay back the amount of money you are requesting to borrow.
That’s the short version. Actually, there is much, much more involved in determining your credit score. However, what should be important to you is knowing how to read your credit report and how to raise that score so that you are able to get the things you need. Remember that – the things you NEED, not the things you WANT!
Let’s start with how to get your credit report in the first place. There are three major credit reporting agencies that will offer you the one free credit report you get each year. They are Experian, TransUnion, and Equifax.
Even though you get one free credit report each year, experts suggest that if you are serious about improving your credit score, you need to examine a report from each of the three major credit reporting agencies. This will, however cost you a small fee from the other two, so keep that in mind.
Why do they suggest you have all three? Creditors can pick and choose which credit reporting agency they want to report to. Some will report to all three, but many won’t. You may find that what is included on one report isn’t on another. The reports will have different information because it's a voluntary system, and creditors subscribe to whichever agency they want -- if any at all.
For more information about credit, please refer to my website http://managingcreditdebt.homestead.com/index.html
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