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Free Annual Credit Report Government

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Short Credit Score History

Not too many years ago, people simply went to the local bank to get a loan with which to

buy a house, a new car, start a business or simply to tide themselves over during tough times.

The decision by the bank to make this loan was usually made by the banker based on the fact that your father and grandfather had done business with the bank for years and had a good standing with them.

The banker had probably known you since you were a small child, went to the same church with you, knew your parents and just had a good feel for your character and integrity. And, this was the basis for the decision to grant you a loan.

Today we have become such a global world that lenders may be thousands of miles away from where you live and not only don't know you, but they will probably never even meet you. Yet, they somehow have to determine if you are a good credit risk for lending their money too.

Thus the advent of the credit score as a means to determine your credit worthiness.

Credit Bureau Score

Today there are three major credit reporting agencies that are used by most lenders to find out all about your credit history before they decide to grant you a loan. These are Experian, Equifax and TransUnion.

Entities where you have previously purchased an item on credit will report this purchase, plus your payment history, to these credit bureaus. So, if you are late making your payments or simply don't repay your loan in its entirety this information will be reported to these credit agencies and will show as a negative in your credit file.

However, the opposite is also true. If you have made all your payments on time and satisfactorily paid off your debt, then this will have a positive impact on your credit history and credit scores.

Each of the credit reporting agencies have devised a scoring algorithm which they apply to the data in your credit history to determine if you are a good credit risk and your likelihood of repaying any future loans that might be extended to you.

Therefore, for your future borrowing power it is important that you monitor and take care of your credit health.

Free Yearly Credit Report

If you do not know what your credit history looks like with these credit reporting agencies, then it is important that you get a copy of your credit report.

Even if you think your credit is just fine you may still want to review your credit report to make sure there are no clerical errors. After all the data is reported to the credit bureaus by humans and it is often posted by humans.

One place where a number of errors occur is when a Jr. and Sr. are involved. Actually, this is a pretty common error that is found when credit reports are reviewed.

You might also want to see just how many companies are inquiring about your credit history and put a stop to some of those inquires.

If there are errors in your credit file, it often takes 30 to 60 days to get these corrected and you certainly don't want to wait until you need your credit for a new home or new car to find out that there are incorrect items in your file that will keep you from getting approval for that loan for which you have applied.