12 Июн. 2014 г.|
If you had known that Bob had a long history of borrowing money from friends -- and not paying them back -- you probably wouldn't have lent him the cash in the first place.Large lending institutions like banks, mortgage companies and other creditors take the same risk when they give loans to consumers for buying homes, financing cars and paying for a college education. Creditors attempt to minimize the risk of these loans by carefully examining the credit history of borrowers. If a borrower has a bad credit history, then the lender might not give him a loan, or may charge him a higher interest rate.If you've ever owned a credit card or applied for a loan, then you have a credit history. Your credit history is compiled and maintained by companies called credit reporting agencies or credit bureaus. Credit reporting agencies collect your credit history from credit card companies, banks, mortgage companies and other creditors to create an in-depth credit report.
The information in that report is also used to calculate a three-digit credit score.Every time you apply for credit, the bank or credit card company calls up one or more of these credit reporting agencies to review your credit report and credit score. The lending institution will decide whether to extend you a loan -- and at what interest rate -- largely based on the credit history reported by those agencies.Credit reporting agencies are powerful institutions. Even worse, credit reports are often requested by employers, landlords and insurance companies. That's why it's so important to make sure that everything on your credit report is true and accurate. Individuals had no idea why they were denied credit or whether or not their reports contained mistakes.
Beginning with the Fair Credit Reporting Act in 1971 and continuing with recent legislation, U.S.