When you get ready to buy a new home or car, the first thing you have to do is obtain your credit reports and score to determine your eligibility for credit. In essence, this is how credit reports help you determine your financial health. If you have good credit, then you can easily purchase the things you want in life because you will be offered credit at rock-bottom interest rates. Conversely, if you have bad credit, then it is very difficult to find credit anywhere and it will almost seem like an impossible task to get anything of value.
If you have poor credit, you may wonder “what are credit reports?” Well, a credit report is simply a summary of all of your financial data, such as your payment history, debt to income ratio, and scores from all of the major credit reporting agencies. All of this information is collated and analyzed, and the resulting reports will be used in order to determine which factors are most important to you and your personal financial success. For example, if you happen to have a low payment history, that will reflect in your credit report negatively. But if you happen to have a high debt to income ratio, that will reflect positively in your credit report. This is why it is so important to pay off any debts as quickly as possible.
So “what are credit reports?” Are they really that important? In reality, the answers to both of these questions are… not very important. Your credit report only helps you determine your eligibility for credit; the rest is up to you!
Do credit reports show you what your credit score is? Not really. The fact is, if you were able to purchase a house or new vehicle, then you would have the necessary funds in order to pay for it. However, unless you have stellar credit, you most likely will not qualify for financing. So credit reports simply do not factor into your ability to obtain credit.
Do credit reports show you what your credit score is? In most cases, no. You are not obtaining your credit score via a complex mathematical formula, therefore it is not relevant; therefore it is not necessary. There are no formulas to determine your credit score – this is a fundamental rule of the game.
Do credit reports show you what your credit score is? Absolutely not. While this information may be used by various companies and lenders for their own purposes, it is not something that is considered very important when determining your eligibility for credit. You will get a much better rate if you do not have to worry about this issue.
