How Much Do You Know About Your Personal Credit Report?

Your personal credit report is crucial to any decision to extend credit to you and it is vital to understand just what your report is and how you can influence the story it tells to a potential lender.

You perhaps know all too well that the information in your credit report is used by the credit card and finance companies when deciding whether to extend credit to you, but do you know just what information your credit report contains? Did you know for example that the information which are contained in your credit report could influence whether or not you can purchase a new home or are going to need to stay in your current 'shoebox'?

A lot ofIn a lot of cases people believe that when a credit card company or other lender looks at your credit report that company is simply looking to see your credit score and, although this is definitiely one of the things that they do look at, they are in fact looking at much more. Most especially, lenders are looking to see the amount of debt you have in comparison to to your income and even fairly small accounts, such as those with a mail order company, will be treated as a deduction from your income when when it comes to considering a request for a loan.

If a lender determines that you have more money going out than you have coming in then your loan request will undoubtedly be turned down. Actually, by law a specified percentage of your income has to be available to meet the payments on a loan before the lender is permitted to approve it, whatever the purpose of the loan.

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

A lender will also look to see whether or not any of your accounts have run into debt during the past seven years and ifthese debts have now been paid. If there are payments outstanding on a current agreement lenders will be very wary about giving you further credit until these are paid off.

Finally, your credit report will show whether you have filed for bankruptcy, genrally in the last ten years. A few people believe that a lender is much more likely to lend to you if you have filed for bankruptcy because they have the added protection of knowing that you cannot file again for a number of years. This however is not the case and filing for personal bankruptcy is viewed as a red warning flag by the finance and credit card companies showing that you have already shown a tendency to get yourself in over your head when it comes to managing your finances.

Your credit report is a very important document and one which you should not only understand but which you ought to review from time to time for your own protection. Happily, the law requires that you be given a copy of your credit report once every year upon 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?