Having The Best Credit Report…

It’s no secret that the best credit report can get you the credit card or mortgage you want. But did you also know that it can save you money on car insurance? Or help you get a job?

While there are legal limits on who can get a copy of your credit file (I’ll spell those out in another article), the information in credit reports is very valuable to a lot of different companies. In fact, credit bureaus are continually trying to come up with new ways to sell credit report information. Some of these include:

  • Services that predict whether consumers are likely to have credit problems or file bankruptcy in the future.

  • Notification services that warn creditors if their customers are falling behind on other bills. For instance, if you fail to make two payments on your Visa card, the credit bureau may report that delinquency to your other card issuers, to warn them that you may be having trouble paying your bills.

  • Location services that help creditors, landlords, and collection agencies track down consumers. One credit bureau service, for example, sells the names and addresses of a consumer’s current or previous neighbors, so debt collectors can contact them to find those who haven’t paid. Another service will provide a listing of the names and addresses of all the people who have applied for credit using a certain Social Security number. The idea here is to catch anyone who has tried to change his or her identity when applying for credit. Some of these lists are sold not only to debt collectors but also to alumni associations and membership groups that want to locate lost members.

This means it’s more important than ever for you to make sure that your credit report is complete, error-free, and up-to-date. More importantly, your credit report should make you look as financially attractive as possible. With that in mind, here’s how lenders look at credit reports.