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The term credit report is generally used as synonymous with credit history, credit reputation, credit score and credit rating. A credit report an elaborate credit history of a person or company fabricated by a credit bureau or credit agency. It’s a detailed account of past borrowing, repaying, late payments and bankruptcy of a person or a company. A lender uses a credit report in determining creditworthiness of a loan applicant. The banks or credit card companies forward the information about the person applying for credit, to the credit bureaus. The credit bureaus continuously keep on updating the information on the status of the person’s credit accounts, address or any other changes he/she might have made since the last time applied for any credit and this information is very useful for the lenders to determine the credit worthiness of a person or a company. A genuine credit report contains the following information. • Personal data (current and previous addresses, social security number, employment history) • Summary of credit history (number and type of accounts that are past-due or in good standing) • Detailed account information • Inquires into applicant's credit history (number and type of inquiries into applicant's credit report) • Details of any accounts turned over to credit agency (such as information about liens, wages garnishments via federal, state or county records) A bad credit report literally means negative or bad financial reputation. It becomes very difficult for a person to clear it off, if negative truthful and accurate information appears on the credit report. This negative reputation stays for about seven years, while bankruptcy reports typically stays on the credit report for about 10 years. The credit reports play key role in almost all types of lending in the financial services industry. They are helpful in determining means and willingness of an individual or entity to repay indebtedness. They help to decide whether to extend credit, and on what terms. They have become even more important since they have become important element to choose the APR (annual percentage rate).
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