Credit - Head Matters

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3. Creditworthiness & Purpose of Credit Records


Some people think they have good credit. Then they apply for a loan and are refused. They are surprised to learn there are some problems with their credit. The best way to find out if you have good credit is to get a copy of your credit report. For a lender, a credit report provides a message about how likely you are to repay the money they loan to you. If you get your credit report, you might find mistakes or get some ideas on what you can do to improve your credit.

a. Credit Report


A credit report is a record of how you have paid your credit card debit and other loans—your credit history. A credit report shows how much debt you have, if you have made payments on time, and if you have not paid back some loans at all.

Credit reports are compiled by national credit-reporting agencies. The three major agencies in the United States are Experian, TransUnion and Equifax. Creditors rely on this information about how you’ve handled your loans in the past to decide how likely you are to repay a new loan. When you apply for credit or a loan, you give the lender permission to order your credit report from a credit-reporting agency.

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