A credit report is a document issued by money lending agencies to credit consumers to notify them of their financial status and standing. The report is largely focused on a number, ranges from 300 to over 900 depending on the lender issuing the statement.

There are 3 major credit agencies that provide credit reports, including Equifax, Experian, and TransUnion. These companies use closely guarded formulas and spending patterns to determine what one’s credit score should be. Everything from the time of payment, to the tax rate, to the interest rate on persons credit cards are factored into the report. Also measured is one’s potential for credit-based success or failure based on past credit damage, mortgage payments, or closeness to going bankrupt. Another critical factor is the amount of open credit lines one has, the more open lines, the more worry a lender generates, even if payments are on time and below spending limits.

The credit offers and applications one makes severely affect his or her credit score, and the coinciding report. The credit report is mainly for credit companies to check and loan lenders to make sure that payments will be precise and on time. As of late, most companies will issue free credit reports to consumers online for their convenience, although the credit report can be purchased directly from the leading score givers in the industry, such as FICO. Interestingly, the more one checks his or her credit reports, the lower ones credit score tends to become. This is because most lenders see frequent account checking as a sign of consumer financial worry and is usually an indicator of instability or impending credit collapse.

As credit reporting goes, the higher ones score, the higher the probability of receiving financial aid or a loan if and when necessary. Those consumers with credit ratings less than 500 will easily have more difficulty with lenders than their 500+ scoring counterparts.