A Good Credit Report - The Key To Cheap Finance

Is your credit report important? There are many people who would not consider their credit rating as something too important to them in their lives. There are some people who, while acknowledging its importance, would not be too concerned about the issue or understand the reasons for its importance. Well, for these people, they should at least be aware of the uses of credit reports in the world in which we live.

Although it seems obvious to state it, the credit reports are mainly concerned with the risk assessment of lending money to you. Lenders are obsessed by one thing, which is the repayment of their loan. Therefore, they developed the credit score to evaluate your chance to repay their fund, which is then used to approve or reject your credit application. If that is the goal, some more sophisticated lenders desire to participate in a wider market share and to lend to high-risk borrowers, and this create different categories of loans that people with low scores may benefit from. These loans have consistently higher interest rates and other terms are less favorable and this will be the price to pay for a lower credit rating.

since the loans will be used to finance housing, education, cars, and most other major purchases in life, the failure to get access to credit,or attractive terms and conditions, then it is an important reason to be more aware of your credit rating report and ensure as far as possible it is in favourable condition.

Credit reports will also be used when you enter into lease or rental of housing. This is usually because the owner wants to be sure about your creditworthiness. Thus, keeping your credit score healthy at this stage will be important for you in getting the housing rental and lease application being approved.

There is also a tendency for employers to use credit ratings when assessing job applicants. The reasons are the use of credit reports are obviously different for each employer, but there is a consensus that a good credit report and a good record of financial commitments of the meeting is a good sign that the potential employee is a reliable and worth employment. While it does seem slightly perverse that the very people that will need a job the most are precisely the ones that can be denied it but that's the direction things are moving in.

About the author:

Joseph Kenny is the webmaster of the UK credit card comparison site http://www.creditcards121.co m/, where you can find a selection of credit card advice. For US visitors there is also the comparison site http://www.credit-cards-i nfo.com/ for all US interest free offers.

Written by: Joseph Kenny