Credit Reports – Basic Types
A Credit Report is an effective way of judging how good a person is at handling money. In other words, it is a document to show the details of financial transactions made by a person such as loans, mortgages, debts and so on. It is essential for a person to have a good credit report with no or the least negative information about the credit that has been managed.
Credit reports are broadly classified into three types. They are:
- Annual credit reports
- Consumer credit reports
- Business credit reports
All these three types of credit reports are to be compiled by the credit bureaus. One such credit bureau that documents the credit history of an individual or an organization is Equifax in the United States.
Consumer credit reports will include all details of the individual’s transactions such as loans taken, terms within which they have been repaid and so on. Negative information about the credit of a person will also be included in a separate section in the credit report so that it can guide the lenders properly when they get to review the report. Consumer credit reports can be demanded to be compiled for the person at any time all round the year. It will not be done free of cost unlike the other two types of credit reports.
The sections of a consumer credit report may be the personal information section and other sections for mentioning about the dings (negative credit history), names of bodies that have accessed or reviewed the credit report etc.
Business credit reports are indeed necessary for other institutions or other bodies in business to be aware of the credit history and score of the individual organization. This will let others to have a guideline on whether to trust the particular organization with handling money.
It will also help others make decisions about lending or borrowing, only after analysing the report critically.
Annual credit reports can be done by the credit bureaus and usually all the three main credit bureaus of the United States participate in preparing the document or at least it is reviewed by the other two bureaus if one of them works at compiling the credit report. Registering online with the personal information of name, gender, social security number etc will be taken into consideration, thus documenting the credit information. All three types of reports can be requested for compilation through websites.