Credit reports are often used by creditors to determine how much of a risk a person would be to lend to. These reports contain information about a persons financial dealings, with some other limited personal information.
There are a number of people who could potentially view your credit report, including the government, banks and other creditors, and insurance companies. It is also possible for employers, both present and prospective, to view your credit report. This is common in professions where they are worried about company theft or embezzlement.
In fact almost anyone can see your credit report providing that they are able to offer an actual financial reason why they should be able to see your credit report. Each person is also eligible to receive three free copies of their credit report every year, one from each of the different credit reporting agencies.
Since there are so many potentially important people who could looking at your credit report, it is important to identify any problems and try to fix them as soon as possible. This can not only make it easier to receive a loan or mortgage, but can also effect many other parts of your life.
At first glance, a credit report can seem very confusing, but all of the information in a credit report can basically be divided into four sections.
Personal Information: Credit Reports are prohibited from containing information about race, religion, or sexual orientation, but they do contain a great deal of other identifying information.
This includes the persons name, aliases, current addresses, previous addresses, Social Security Number, Date of Birth, current employer, past employer, and information about husbands or wives.
Credit Information: As the name implies, credit reports contain a great deal of information about your credit history. This includes mortgages, credit card debt, unpaid debt, debt that has been sent to a collections agency, and some utility information. Also, in the case of loans it has information such as the type of loan, length, cosigners, and a two year payment history.
While the credit information is usually very inclusive, it can not include bankruptcies that are more than 10 years old or other debt that is older than 7 years.
Information from Public Records: This includes any state or country government records, including information on bankruptcies, tax liens, or other civil judgments. It can also include child support.
Recent Credit Report Requests:: This section lists the people who have requested your credit report over the last year, although it goes back 2 years for employers. Sometimes, too much activity can raise a red flag to lenders and may also be an indication of identity theft.
Credit reports are used by prospective lenders to determine if an individual is eligible to receive credit.
Since a persons credit report is one of the first things a creditor will look at, as a borrower it is important to try to fix any errors and clean up your credit report as much as possible before applying for a loan.
Credit reports are a special document that contains information about a persons financial records. It will include information about child support, debt, credit lines, mortgages, and in some cases utilities. This information details how the person has been in regards to using credit and paying it back.
While there is a great deal of personal information in a credit report, there is a lot of things that can not be printed in a credit report. This is as a result of the Fair Credit Reporting Act of 1971, which put an end to some very compromising data collection practices by credit reporting agencies.
For instance, prior to 1971, it was not uncommon for there to be information gleaned from actual surveillance in the credit report. They also often included information about race, religion, sexual preference, and criminal background. Credit reports where then used as an excuse to deny people credit, instead of determining if they were credit worthy.
Today the credit report has had the discriminatory and compromising information that was previously found in credit reports removed. Instead, the credit report is limited to only providing information about the persons finances and current debt load.
When a person misses a payment to a lender, creditor, or certain utility companies, this would be noted on the credit report.
Only debt that is relatively recent is included as well. For example, for bankruptcies, only those in the last 10 years are included in a credit report. Other types of debt, such as debt that has been sent to a collection agency, is only included for 7 years on a credit report.
Credit information is collected by three different credit reporting agencies, Transunion, EquiFax, and Experian, who store all this information and resell it as credit reports. Sometimes when applying for a mortgage, the credit report will be included in the cost of the application, but its cost should not exceed $20.
As a consumer, each credit reporting agency is required to provide one free credit report a year. It is a good idea to not get all three at once, instead spreading them out over the length of the entire year. This way, the credit report can be reviewed and corrected, then another copy can be received, which should reflect the changes. In this manner, it may be possible to not have to pay to receive your own credit report.
It is also possible to pay and receive a credit report whenever needed. However, it should be noted that creditors do look at how often a credit report has been requested and if it has been requested too much, this can count against you.
Credit reports can be viewed by a number of people, including government agencies, employers, insurance companies, and lenders.
It is also possible for many other people, t, such as landlords, to view your credit report, as long as they can provide a real financial reason.
A mortgage is a special type of loan that can allow almost anyone to eventually own a loan. Owning a home can be a great investment and for many, getting a mortgage is the only way that this can be achieved. The first mortgages actually date back to medieval times, but they have changed a great deal since then.
Basically, a mortgage is just a loan that uses a home or land as collateral. Typically, historians credit England with having created the first mortgages, but these were often very unfair to the borrower. For instance, these first mortgages would require a very large down payment by todays standards, often over 50% and the borrower was not considered to actually own the land, until the mortgage had been completely paid off. It would not be until the 17th century that the rights of borrowers would begin to take a turn upwards, when it became the standard for the borrower to have ownership rights to the land, even if it had not been paid off yet.
Today, in addition to the general benefits of owning a home, such as not having a landlord and being able to modify the home and property however you wish, there are also a number of other tax benefits. The mortgage interest deduction, which allows a tax payer to deduct interest payments from their taxes, was instated in 1913 and today is a very powerful incentive for home ownership.
While today, many people take advantage of this tax credit, at the time it was intended to stimulate business mortgages, because during the beginning of the 20th century, most homeowners would save up their money until they had enough time to purchase a home without a mortgage.
It would not be until the US Federal Housing Administration (FHA) and the Federal National Mortgage Association (Fannie Mae) were created that average citizens began taking advantage of the tax credit allowing interest payments to be deducted from their taxes. This is because these institutions were in part responsible for increasing the amount of money available to lenders, which in turn allowed the lenders to offer more home loans.
Currently, there is another powerful incentive for new homeowners, who can receive 10% of the cost of their home in the form of a credit from the federal government. This can be up to $8,000 and is part of the Federal Housing Tax Credit for new Homeowners.
Prior to the Great Depression, most lenders took money from deposits and lend it out to new homeowners. However, when the banking system began to crumble, the Federal Government created a several government agencies to fund the mortgage market.
Today, the government agencies responsible for circulating funds in the mortgage market are the Federal National Mortgage Association (Fannie Mae,), the Federal Home Loan Mortgage Corporation (Freddie Mac,), and the Government National Mortgage Association (Ginnie Mae.) These agencies help support the home mortgage industry and act in some regards as a stock market.
Fannie Mae is responsible for creating financial products, which help low to middle income families purchase homes. Ginnie Mae creates a number of security products that are made up of mortgage loans is part of HUD, which is the US Department of Housing and Urban Development. Ginnie Mae has a guarantee that even if the debtors become delinquent, investors who purchase their securty products will still get paid. Freddie Mac is in some regards similar to Ginnie Mae, because they also create investment packages, which are guaranteed, then reinvest this money in the mortgage market.
Often, people think of their bank as the source of their loan, but in many cases this is only partially true. Often, the bank will simply process the application and take the monthly mortgage payment, but they are not the one actually lending the money. Instead, they are simply servicing the loan and the actual lenders are investors who have purchased mortgage based securities.
One of the reasons that mortgage based securities are so popular as investments is that even if the homeowner is unable to pay for their home and goes into foreclosure, the investors still have the land and home. They are in turn almost always able to sell this property, in many cases still making a profit.