Online Credit Report and You |
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Your online credit report is an
electronic record of your credit activities. These activities range from
borrowing to buy a car or a home, to applying for a loan or credit card. Online credit reports are used widely across the world today. Every time you apply for a credit card or other loan, it registers as an inquiry on your online credit report. More important, an online credit report is a record of how you use credit and how much of it you have available. So, if you're late in making a monthly payment, it shows up on your online credit report. The online credit report is based on a few different types of information. It is based on your history of payment, the amount of debt you owe and the types of credit you use. A credit score is represented by a single number, based on the analysis of information contained in your online credit report. It provides creditors and loan agencies information on how likely you are or not to repay your debts. The credit scores are very important. They greatly influence your ability to gain credit, housing, utilities and insurance. The longer your credit history is, the more you are influenced by it. And, the longer your credit history is, your future credit applications are more influenced by it. So, before you apply for a credit card or loan, you should review a copy of your online credit report from each of the three major credit bureaus to avoid any surprises. Financial experts suggest you review your credit at least once a year. A copy of your online credit report from each of the three bureaus generally costs $9. But in some states, including California and Connecticut, the fee is slightly less. Even then, to review all three major online credit reports, at least once a year would cost nearly $30. In addition, credit bureaus and other online credit report services sell annual subscriptions, often at the $50 to $100 range. These subscriptions keep you informed of any and all activities to your online credit report. And, if you've been denied credit, you'll certainly need to take a closer look at your online credit report, to spot any errors or see if there are any omissions. Remember, if you have been denied credit for reasons based on the content of your online credit report, under the Fair credit reporting Act, you have the right to receive a free online credit report. The issuing credit bureaus will have to give you a free online credit report within 60 days of receiving a credit-denial notice. One of the reasons why you could be denied credit is excessive inquiries on your online credit report. There are two types of credit inquiries that can be recorded in your online credit report, hard inquiries and soft inquiries. A hard inquiry is when you seek to obtain credit, for example, when you apply for a loan or credit card. So, each time you fill out a credit card application at a department store, the inquiry counts as a hard inquiry. But the creditor needs your authorization for a hard inquiry on your online credit report. A prospective lender or other creditor will be concerned about an applicant whose online credit report shows a high volume of hard inquiries. That's because it suggests a carefree attitude in applying for credit or an effort to borrow excessively. Borrowing too much, also called over-leveraging, is a potential red flag for creditors. It signals that you may have more difficulty repaying your debts than a person who judiciously applies for credit. A soft inquiry is one where the inquiry is not recorded in your online credit report. A soft inquiry does not constitute a bona-fide request for credit. For example, a soft inquiry occurs when request for a copy of your online credit report. A soft inquiry also occurs when a company gathers potential marketing information about you based on your online credit report. You can opt out of these kinds of inquiries. The Fair online credit reporting Act entitles you to contact each or all of the major credit bureaus and request them to stop sending you card solicitations and related offers. So, your credit report is very important if you intend to apply for a loan, or borrow for a major purchase. And, it's always best to check it in advance and not wait until your credit application has been denied. |
