Arvest Education Center

Benefits of a Good Credit Report

A solid credit history can be one of your most useful and powerful financial assets. A record of prudent credit use and prompt payments can enable you to not only qualify for credit when you need it, but may also enable you to get a lower interest rate on future loans.

Three main credit agencies gather financial information on individuals and then make the information available to lenders. For a fee, they also will make it available to you. The agencies are:

  • TransUnion – (800) 888-4213
  • Experian – (888) 397-3742
  • Equifax – (800) 997-2493

These agencies compile personal information about individuals, including:

  • Age
  • Social security number
  • Current/Previous addresses
  • Employers
  • Marital status

In addition, your credit report also includes information on current and prior credit relationships, including:

  • Date established
  • Maximum allowed credit
  • High balance
  • Current balance
  • Payment history

To maximize your credit score, show a solid history of moderate borrowing and quick payment of bills. Bankruptcy, late payments, too many credit cards with high balances and even too many applications for credit damage your credit score.

Lenders use a credit report, along with evaluating capacity to repay, character, and any collateral offered against the loan, in making decisions to lend money. Many lenders also take these same issues into account when deciding what interest rate to charge or type of loan to offer. Credit card companies use credit reports extensively to determine rates and fees to offer on different cards.

Review your credit report.

Make sure your credit report is accurate and up to date. You are entitled to one free copy of your credit report each year via annualcreditreport.com.

If you see an error on a report, be sure to contact the credit agency in writing. Point out the error and ask to have it corrected. Negative information generally remains in your report for seven years. Bankruptcies can remain for 10 years. Most lenders pay particular attention to the previous few years of activity.

This content has been provided by Financial Wisdom and is intended to serve as a general guideline.