Your credit: How credit reports work Banking Center

Your credit can determine what you can buy, what type of car you drive,  and even where you can live. It is important to maintain the best credit report possible. Each person should check his or her credit report and make sure it is correct. Always get your credit in order when shopping for a loan. To understand the credit process you first need to understand what information is contained in a credit report. Although the style, format and coding may be different depending on which credit reporting bureau is used, the typical person's credit report includes four of the following types of information: Identifying information:  your name, nicknames, current and previous addresses, Social Security number, date of birth, and current and previous employers. This information comes from any credit application you have completed, and its accuracy depends on your filling out forms clearly, completely and consistently each time you apply for credit. Credit information:  specific information about each account including the date opened, credit limit or loan amount, balance, monthly payment and payment pattern during the past several years. The report also states whether anyone else besides you (i. e., a spouse or cosigner) is responsible for paying the account. This information comes from companies that do business with you. Public record information:  federal district bankruptcy records; state and county court records, tax liens and monetary judgments; and, in some states, overdue child support payments. This information comes from public records. Inquiries: includes the names of those who have obtained a copy of your credit report for any reason. This information comes from the credit reporting agency, and it remains available for as long as two years, according to federal law. How is this information used? A credit bureau score is one type of credit score. It is calculated from the information on your credit bureau file at the time that the information was requested. Consequently, a credit score is like a snapshot: It sums up, at one given point in time, what your past and current credit usage say about your future credit performance. Credit scoring helps lenders apply one set of rules to everybody. The sophistication of today's models allow for certain behavior patterns. As a result, a 20-year-old's credit history would not be compared to a 45-year-old's credit history. One reason these scoring models are so widely used is because they can differentiate between the credit patterns of individuals. Thinking about an Auto Loan? Home Equity? Any bank product? We give you unbiased rates for your area at bankrate.com.