How Much Do You Know About Your Credit Report?

You perhaps know only too well that the information which is contained in your personal credit report is used by the credit card and loan companies when considering whether or not to extend you credit, but do you know what information your personal credit report contains? For example, did you know that the information which are contained in your personal credit report could influence whether or not you are able to buy that new house or are going to need to remain in your current 'shoebox'?

A lot ofIn a lot of cases people think that when a company looks at your personal credit report that company is just looking at your credit score and, while this is definitely one thing that they do look at, they are in fact looking at a great deal more. In particular, they are looking to see how much debt you have compared to your income and even fairly small accounts, such as those with a mail order catalog company, will be treated as a deduction from your income when when it comes to considering a loan application.

If a lender comes to the conclusion that you have got more money going out than you have coming in then your loan request will undoubtedly be turned down. In fact, by law a certain percentage of your income has to be available to meet the payments on a loan before the lender is allowed to approve it, regardless of the purpose of the loan.

A lender will also be looking back at your credit history for the past seven years to see how well you have managed any loans during that period. In particular, they will look at whether you have made your payments on time and will play close attention to any payments which were more than thirty days late. It might not have seemed especially important to you when you got into difficulty and were late with your payments for a few months on one of your accounts, but any lender will certainly consider this when assessing the risk of lending to you now.

Lenders is also going to look to see whether or not any of your accounts have run into debt during the past seven years and if these debts have now been paid off. If there are outstanding payments on a current agreement lenders will be very wary when it comes to extending you further credit before these are paid off.

Finally, your personal credit report will also show if you have filed for personal bankruptcy, normally within the last ten years. A few people think that a company is far more likely to lend to you if you have filed for bankruptcy because they enjoy the added protection of knowing that you are not able to file again for a number of years. This however is not the case and filing for personal bankruptcy is seen by lenders as a red flag showing that you have already demonstrated a tendency to get yourself in over your head when it comes to handling your money.

Your personal credit report is an important document which you ought not only to understand but which you ought to review occasionally for your own protection and peace of mind. Happily, the law requires that you be sent a copy of your personal credit report once each year on request.

TheDebtAssistanceCenter.com provides information on how to obtain your free annual credit report and answers a wide range of questions such as how can I remove a judgment from my credit report?