What is a Credit Score?

What Is a Credit Score?

A credit report is a statement that takes an account of all the information regarding your past credit activities and your present credit handling status. This analysis of measuring the creditworthiness of an individual or business is then represented numerically and is termed as a credit score.

Credit Reports are more than your Credit History

Credit reports have much more information than just your credit history. These also include the following:

Importance of a Credit Report

When you apply for a loan from a lender, they use your credit report to know about your creditworthiness. It helps them to determine how likely you will repay your loans on time. Therefore, it is always better to have a good credit report to easily qualify for a loan.

Fair Credit Reporting Act (FCRA)

There are three main credit bureaus in the US - Experian, TransUnion, and Equifax, apart from various other small credit bureaus. FCRA regulates all of them and restricts the provision of the credit reports. Therefore, these reports can be sent only to the creditors, employers, government authorities, landlords, etc., under appropriate circumstances.