Everything You Need to Know About Consumer Credit Reports

  • To start off, let us first discuss what a consumer credit report is. This report is essentially a record of an individual’s credit history from a number of sources, including banks, collection agencies, as well as credit card companies. The information displayed on the credit report is then used to calculate said individual’s credit score, which is of high importance when applying for different types of loans or credit cards. (Information credit: https://www.accountability.co.za/services/consumer-credit-reports)

    ‘What makes my credit score so important?’, you ask. Well, your credit score will indicate your creditworthiness to the respective credit provider. If your credit is in good standing, or you have a good credit history, your application will most likely be approved. However, if you have a negative credit history, due to late payments for example, your application will be rejected.

    A consumer credit report is like a spotlight into your financial background, revealing your personal payment history, and your lending worthiness. It can also serve as a sentinel against any consumer fraud or identity theft. Your consumer credit report is of such high importance that you should make regularly reviewing your report a priority when it comes to your personal financial habits.

    ‘Why should I check my consumer credit report regularly?’, you ask. For one, you would be putting your financial health at risk by not obtaining and checking your credit report. How will you know whether the information is correct? How will you know whether your payment cycle has been set up correctly? There are several reasons why individuals should check their credit report. Did you know that a simple downtick in your credit score can lead to higher interest rates on credit and loans? In saying that, it requires more than you simply reviewing your consumer credit report. To fully reap the benefits of regularly checking your report, you need to understand what you are looking at.

    If you are unsatisfied with the information displayed on your consumer credit report, there are several ways that you can improve your credit history and, in turn, your credit score. For starters, you need to ensure that you are making consistent payments. The timelier and more reliable your payments are, the better. As mentioned previously, you need to check your credit reports to investigate what it is that may be causing your credit score to be so low. It could be something as small as your payment cycle being set up incorrectly, causing your payments to be a day or two late.

    In addition to the above, you need to maintain reasonable amounts of unused credit to prove that you make smart financial choices. If you use all your credit up on the first opportunity, it will not look good on your consumer credit report. It would also help to apply for credit only when it is needed. Thereby, causing you to keep your credit enquiries at a low. Finally, you need to check your credit report annually, and dispute any errors that may be hurting your credit score and report.

    There you have it, everything you need to know about consumer credit reports – what they are, why they are important, and what to do if your report is unsatisfactory.