Credit Reporting – The Must Haves

What is Credit Reporting?

It is a report on your financial and credit position compiled by credit reporting agencies both for reference of your lenders and yourself. Where you intend to take a loan, it is important that you go through your credit report and look into it for errors if any in the statement.



In today’s lifestyle loan has become an essential part of day to day life and hence knowing one’s financial and credit status becomes essential. You will be surprised to know that more than seventy percent of Americans do not know their credit score and twenty percent of them have never even seen it.

Structure of a Credit Report

The structure of the credit report helps in analyzing your credit position on various dimensions thereby offering best possible assessment of one’s financial position.

• Amount of Loan Outstanding – Loan outstanding comprises of close to 30% of the information furnished.
• Payment Track Record – The credit report statement provides details about payments made and the time of repayments. Details of defaults if any are also furnished. Around 35% of the statement contains information about payments track record.
• Period of Credit Usage – A credit report is generated only when a person has used credit. If no credit has been used there will be no report. Hence it is important to know the period for which the credit facility has been used by the borrower or the individual and his performance right from the first credit. 15% of the information available on the report pertains to this.
• New Loan or Credit Facilities – Not just past loans, even new loans and credits availed are also reflected in the credit report. The details about new loans availed and the period from which such loans have been availed size upto 10% of the details in the report.
• Nature of Loans – You have details about the number of loans availed and also the nature of loans. Whether they are mortgage loans or personal loans, the details are furnished alongside the loan amount, which amounts to the remaining 10 % of the information available in the report.

What are the Credit Reporting Agencies?

The Credit Report we have been talking about can be got from any one of the following agencies

• Equifax
• TransUnion
• Experian

Things To Remember While Dealing With Your Credit Report

• Stay away from consolidating your loans. It removes the payment history which is essential credit score
• Remember to keep your old accounts. The more the number of cards more will be your credit availability in proportion to the amount you owe.
• Please do not have too many store cards. It tells on your saving habit and lowers the age of credit for each of your cards.

Credit is always a tricky area. You should be careful in each of your moves. Hope this article was helpful!