Your Credit and
Personal Loans

You have finally decided the house needs a roof, and you head down to the local back to see about applying for a personal loan. You may even have them throw an extra $1,000 for a new deck. You may want to stop and do some checking before you go. It is wise to know where you stand on your credit report before applying for any type of loan.

What is a Credit Report?

Basically a credit report is a file held by a credit bureau on you. All lenders will consult this report when determining whether or not to lend you money. It tells the lender if you have been paying your bills on time, what you owe other companies and if you have had any major problems like bankruptcy.

Eons ago, in the age of typewriters and messenger boys, lenders decided whether to let you borrow based on their own factors. If the bank owner hated your father, you were not getting a penny. On the other hand if you looked like a good risk, you had a steady job and a cute kid, you would get the loan. Today credit reports are fair and unbiased way of helping lenders to decide who to lend money too. Age, skin color, and sex have no play in the process.

If You are Denied

If you are denied a personal loan it was probably because of your credit scoring. You have the right to request and receive a copy of your credit report within 60 days of the transaction at no charge.
You can know what you might encounter when you go into apply for a loan by requesting a copy ahead of time from one of the three credit bureaus – Equifax, Experian and Trans Union. This will tell you exactly what is on your report. This is a good thing to check periodically anyway as mistakes do happen. You could even end up with someone else’s bills on there!

Building Good Credit

You can build good credit by paying your bills on time and not borrowing money when you do not really need it. Avoid credit cards and the problems they can bring. Doing these things will allow you to borrow money at a low rate of interest when you really need too.