Credit Education and Importance
As credit tends to impact multiple aspects of the life of an individual it is important to have credit education. Some degree of credit is required when you opt for car, home, college education and many other small basics of life. As credit is not extended in the same manner to each one it is important to have basic credit education.
Credit Education Aspects:
Talking about credit education, the most important topic to be understood is the credit report. This report contains all the basic information needed by a lender. The lender can determine whether you are capable of repaying your loan on time on a regular basis. The credit report includes the credit accounts you have and also the payment history. The compilatio0n of the credit report and knowing who does it is an important aspect of credit education. This education needs to include the credit score, how this is derived and the manner in which this is used by organizations or lenders.
Credit Reporting agency:
This agency of credit reporting is a business that can maintain the credit information of not only individuals but also of different businesses. The lenders send the reports to these agencies and so does other organizations. A credit report is compiled in accordance to this information. This report also includes the credit score.
Data of the Credit Agency:
The credit agencies receive a wide range of data and information which is included in a credit report. The largest providers of credit reporting are the Equifax, Trans Union and Experian in the United States. These agencies receive credit information which is standard and provide reports based on the basic history of a borrower. They set standards for the industry for scoring methodologies and reporting.
Besides the above mentioned three agencies there are a number of agencies offering similar services. Most lenders work with these credit agencies for the required comprehensive reports or other specific information. These agencies partner a number of companies to receive the different data of credit of their customers.
Credit Scores and Credit Reports:
A format which includes a trade line for every credit account established by a specific borrower is followed by the credit report. These trade lines indicate the credit amount issued the monthly payments of a borrower and other delinquent payments. These delinquent payments are reported to the agency after two payments which are missed consecutively. These trade lines show charge-off if there is any default by the borrower.
For miscellaneous details, the credit agency, group the ad hoc items separately from the trade line.
You need to be aware that the adverse items which are reported in a credit report tend to stay there for a minimum period of seven years, while bankruptcies are included for a ten year period.
With the very basic credit education you can understand the inside out of your credit report and credit scores. You can work on improving the credit scores with a little help from the qualified and experienced professionals at a nominal fee.