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What on earth is a credit report?

If you are looking to buy a home, any bank interested in giving you a mortgage will request to see your credit report. Before you decide to look for a new home, you may want to consider checking your credit report to see whether or not you are considered ‘credit fit’. A low credit score will most likely result in your mortgage request being denied and you having to work to improve your score before trying again. In the interest of saving you time and hassles, we’ve put together a bullet point list of what you need to know about a credit report.

Each individual making purchases using credit from various credit providers will have a credit report. This credit includes store cards, car loans, bank loans, mortgages, credit cards etc.

These reports are compiled by the three major credit bureaus, TransUnion, Experian and XDS, using information provided by your credit providers every 30 days. You can request reports from the individual bureaus as you need them.

  • The report covers a 24-month period of credit loans and carefully tracks your payment history

  • Your credit report will show any defaults in payment, even if you haven’t been handed over for collection or legal action

  • A high credit score indicates good credit management and a low credit score would be the result of mismanagement of your credit

  • Your credit report can be requested by anyone interested in giving you credit. They will then use the information in the report to decide whether they will extend further credit to you

  • The National Credit Act states that you are entitled to one free credit report from each bureau per annum

Despite the last point, very few people who have credit regularly check their credit score. If you are planning on requesting further credit it is important to ensure that your report accurately reflects your current and previous debt management. Mistakes can be made and could radically affect your final score, but you will only know if you actually check. If you are planning on purchasing a home it is even more important to know your score before you start looking.

Knowledge is power

Knowing that your credit score is on the low-side will allow you to take the responsible steps to rectify any outstanding payments and prove that you can manage any debt you may have. It is important to know that this is NOT a quick fix as you need to prove yourself over time, but with the right support and determination, it can be done.

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Sasha

Client Liaison / Marketing