Credit Reports – you either wish you had a better one, or you wish you didnt have one! It's a bit of a dilemma isn't it. People work tirelessly to build up a good credit score, so that in the future they might be able to borrow in a situation when someone else might not be able to.
But what situation might this be, and hence why should you be even the least bit interested in knowing what is on your credit report? Let's run through a couple of situations so that you can possibly identify one in which your individual credit report may come in handy.
Firstly, let's imagine that you are thinking of buying a house, but will need a mortgage to do so. You have yet to obtain credit report statistics from a reporting company, so you have absolutely no idea where you stand in the line for a credit facility.
You go ahead and start looking for houses, until you eventually come across one which takes you and your partners fancy. You then approach the bank and ask to have the loan for an amount which is relatively large.
Unfortunately, because you didn't obtain credit reports for you or your partner prior to this application, you are told that you need to improve your credit, and are therefore declined on your loan application.
Clearly, this could have been avoided if you were to obtain a credit report before you approached the bank, as it would have given you time to improve your credit score.
You want to buy a house, and know that you will have to obtain free credit report for both you and your partner before you approach your bank. This is because you remember that a while back, something bad was inserted on to your credit report when you failed to pay a bill on time. This would have set you back quite a bit, and resulted in an ultimate drop in your credit score.
Thankfully though, you were able to correct this because you requested the private copy of your free credit report. Your bank therefore preapproves a loan for you, and you are then able to start looking for the house of your dreams.
As you can see, the family in example 2 clearly did the right thing by asking a credit reporting agency for a copy of their report in advance, and then taking action to bring the score up to an acceptable level.
This is what everyone should do to ensure that they have the best possible chance of gaining the lending facility they need for any future life events.