Merchants have always kept tabs on their customers’ credit lines, and as early as the 1800’s organizations were collecting this valuable information from merchants and then sharing them with lenders. Unfortunately, only the negative was ever reported and Personal Information was hardly off-limits. Moreover, customers had no idea what information was exchanged, as they could not obtain these credit reports! By the 1830’s, third-party Collection agencies were finally established and they eventually evolved into what we now know as Credit Bureaus; the collected information was now more holistic, less intrusive, and it gradually became public domain.
Information on your credit report consists of personal identity information, Credit History, public records, a list of all the other institutions that have requested the report, and a summary of any disputes. Your race, religion, heath, income, driving records, amount of money in the bank account, and criminal records are not included in the report.
After a lending institution looks over your report, it will then give you a credit score. There are different calculations for credit scores. Most lenders use a method that summarizes your credit history into a number from 300 to 850. The higher score you get, the more likely you are to qualify for premier credit cards and substantial loans, as you are deemed a low risk. Your score will affect what credit cards and loans you can successfully achieve, the interest rate that is attached to them, as well as your chances at obtaining a car or house, etc. Sometimes your insurance rates can even be affected. So it is very important!
You can find out your credit report by ordering it online. If it’s not an impressive report, you can work on reestablishing it with a Secured Credit card or more moderate loan of some sort that you work to pay off in a timely manner. Also, there might be errors in your report and you may find that simply correcting them drastically improves your standing!
Closing old credit cards will not improve your standing however. In fact, the longer you’ve stuck to an account, the better. As well, try to deter inquiries into your report – the more inquiries, the lower your score! In general, reduce your balances, pay your bills on time, and don’t open any new accounts. This will all help you improve your credit report.
About The Author
Chris McCullough is the founder of CreditcardSuperstar.com, a credit card shopping service which allows consumers to shop, compare and apply for low interest rate credit cards online. The leading site offers over 75 different credit cards from Discover, Chase, American Express and other top banks and financial institutions. A free report on how to get the best credit card and avoid common mistakes is available at http://www.creditcardsuperstar.com/.