Your credit report describes your financial transactions. Almost every financial transaction you are involved in reportes to at least one of the major credit bureaus. These credit bureaus keep files on everyone. There are credit files on every small business as well.
Your credit report is a history of the accounts you have opened and how you have paid them. The companies that have extended credit to you regularly report to the credit bureau how well you are making payments. Companies where you apply for credit ask to see your credit file to see how you have paid your other accounts up to now. This is called a credit inquiry. Your credit report is made up of these inquiries and reports about how you pay up your bills. When you use or make a payment on your credit card, when you pay a utility bill, or open any kind of account on credit that requires a credit inquiry, a record of that inquiry or credit payment ends up in your credit report.
Gathering information for your credit file
The information gets on your file because your creditors report the information on a monthly basis. This reported information makes up your credit file.
Your credit file also contains personal information such as your name, your address, your telephone number, etc. as well as public record information, including any court actions and liens against your property such as your home, car, furniture, and equipment.
Your credit report, like a school report card, lets people who have a financial relationship with you find out what "grade" you are in. The higher the grade, or credit score, the better your chance of getting a passing mark and graduating to the next level, represented by the credit limit and lower interest rate you are granted by your creditors and lenders.
You can see and correct your credit report
There is, however, an important difference between your school report card and your credit report. You never saw what was on your report card until it was given to you and your parents.
The difference is that you have the opportunity to see at any time what is on your credit report. This allows you to correct any mistakes that could come to the attention of lenders and hurt your "grade." Imagine having had the chance to see your report card before your parents saw it and having had the opportunity to improve it!
