Oct

7

Credit Checks: Understanding The Basics Of Your Credit History

Filed Under Mortgage Articles 
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Hidden amongst the fine print of many applications, lease agreements and other contracts is a clause a that most people over look. This clause usually involves giving the other party permission to perform a credit check, and when it is noticed in an agreement most readers wonder “What is a credit check and why do they want one?”

Simply put, credit checks are a form of confirming a person’s history of repaying loans and other forms of credit. This is often useful information to potential landlords, banks and creditors. If you were in their shoes, you would certainly be interested in knowing how likely the applicant would be to honor their financial agreements.

Credit checks involve sensitive personal data. Therefore, many people are concerned about precisely who they’ve entrusted with their records. Fortunately, the Fair Credit Reporting Act has established unambiguous rules governing credit checks. Your credit data will be accessible to any business giving you a line of credit, to your creditors themselves, and to your insurers.

You must give your employer signed permission to obtain a copy of your credit history. They are limited in how this information can be used or shared with others. Should your credit report be obtained without your express written permission, they may be subject to legal action.

Lastly, people may be interested to know whether it’s possible to receive their own credit history information or do credit checks on themselves. The answer is that they can since the Fair Credit Reporting Act allows people to obtain their credit information from each of the three credit bureaus once a year.

Your Credit Report Score is what defines your credit history, the higher the score the better the credit risk you are to proposed creditors. You can request a free copy of your credit history from one of the three major credit reporting agencies. By knowing your credit score you will be in a better position to negotiate rates, especially if you represent a low risk to creditors. When requesting a copy of your report you should keep in mind that it could take up to three weeks for you to receive, however creditors can obtain your score instantly and are required to give you a copy if you apply for credit.

Once you understand the detail of your credit history it is easy to see why so many financial organizations what to review it before doing business with you and by knowing who can and can not access your most private finical data you can better protect yourself and your credit history form those who would use it for nefarious means.

The article brings out the more important points concerning a persons credit standing, informing people about credit checks and why they are necessary and needed. Knowing your own credit report with score is helpful when applying for credit or loans. This article makes people aware of their rights concerning how other people can access their records and how they can also access their own record complete with credit report scores. Stressing the importance of staying informed on your credit status, the article provides much needed information in our world of credit.

- Daniel Lesser

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