Credit Report and Credit Score

Your credit report contains information about various areas of your life. Along with the obvious, name and address, your credit report has all of the previous addresses that have been reported to the credit bureaus by you or your creditors. They also keep on file your social security number and marital status. Your birthday is there too because many creditors will use this as an identifier for people with the same name.

Your credit score is the biggest tool you will ever have when it comes to your finances. No matter how much money you have in the bank, if you have bad credit, it will cost you thousands of dollars if you plan to make a big purchase. It may even be the determining factor to whether you can make that purchase or not. If your credit score is too low, banks will not lend you money. Good credit on the other hand, can aid you in making all of those purchases you dream of.

One of the great mysteries of life is how the three major credit bureaus (Experian, Equifax, and Trans Union) score credit. They all have secret statistical formulas for determining your credit score, but they are unwilling to divulge exactly what, exactly, constitutes your score. This can make it difficult for people with problem credit to try to improve their score in hopes of obtaining a home or car loan later.