Annual Credit Report

Every year, an annual credit report comes out with a corresponding score at the bottom. This could be from 350 to 800 and it varies from person to person depending on their consumer behaviour.

Your annual credit report is based on different things. This includes your credit history, outstanding debts, credit length, number of inquiries made and the types of credit that you have.

The one that carries the biggest weight is the annual credit report history since this takes into account what has happened over the past 7 to 10 years. During this time, you may have incurred late payments or filed for bankruptcy. If there are none, then you get a perfect score.

Annual credit report must be examined closely

Annual credit report is usually done to verify whether you are eligible for a loan or on any other forms of credit based on your past credit performances. This will reveal your past as well as your previous credit transactions with different lenders and how you deal with it. Thus, a credit check is the reflection of your past credit performance. It works like a report card, which reveals whether you have “passed” or “failed” in a particular subject.

The second biggest chunk comes from any outstanding debts that you may have. This could be a loan that you applied for to pay for a house or a car. If this was paid for already, then that is good. A more recent loan could affect your credit score. Half the percentage value of the second is the length of your annual credit report. If you have had this for 5 years or more, then you are a better off than someone who is just building it.

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