When it comes to obtaining an auto loan or mortgage, your reputation precedes you. Your credit report gives banks and lenders a good idea as to whether you’re a good candidate. Based on the information it contains and your financial history, they can assess how likely you are to pay back the money they give you.
Although most people today are familiar with the credit score, this number is an aggregate of numerous other data points that are pulled from your past activities. It can tell you at a glance how strong your position maybe, but it doesn’t tell the full story in and of itself.
Understanding everything that goes into your credit report can be important for several reasons. Not only does it give you a more detailed view of how lenders may see you, but it can also provide guidance for making better decisions about how you spend your money.
Your credit report shows you a history of your credit cards, loans, and bills, as well as how you may or may not have repaid them. For instance, you may believe you’re in good standing, but a pattern of late payments could come back to haunt you when you want to buy a new car or rent an apartment. Seeing this on your report can give you an opportunity to correct any lapses and help raise your score.
There’s no hiding your financial life from the institutions that provide credit. Everyone should be aware of what their credit reports say about them and understand the ramifications. To learn more, take a look at the accompanying resource by Stein Saks.
This infographic was created by Stein Saks, a TCPA lawyer
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