Why are Credit Reports Important

by | Oct 17, 2011 | Finance

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Credit reports are important for a number of reasons not only for businesses, but for individuals as well. Credit reports are a reflection on the individual’s ability or inability to manage their debts. Everyone does not access their credit report on a yearly basis as they should. This can lead to serious problems in the future. Credit reports help banks decide rather or not a person is responsible enough to receive a loan or a line of credit. It also helps car dealerships in deciding if someone is capable of making the required monthly car payment. It is also the deciding factor mortgage companies’ use before they opt to sell the individual a house.

Credit reports say a lot without ever having to speak. Each person has at least three credit reports. Although, each credit report should contain the same information, most of them do not. This can pose to be a problem, and cause a delay or deny of credit cards, and financing options. Many credit files contain errors and are not spotted until the consumer applies for some type of financing. By this time the damage has already been done. The negative results can be undone, but it takes time and patience.

The first step starts with the individual ordering all three credit reports. The next step involves comparing reports and looking for obvious mistakes. Lots of erroneous information gets posted on the wrong account. This happens every day. Someone hits a wrong key or enters a wrong code, too many individuals with the same name and birth date. This is not uncommon and should not be taken personally. There are billions of people in the world and the possibility of several dozen people having the same name is very common. Credit reports are the basis factor creditor’s use when deciding who to give credit to.

credit reports

credit reports

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