Your Credit report - what is it and what does it contain? Many of you will have, at some point, applied for a loan, credit of some sort or a credit card.  Its usually at that point that the money lender you have chosen to approach to arrange credit will go to one of the leading credit scoring companies such as Experian or Equifax to find out what your credit rating is like.

To explain in layman's terms, credit and whether or not to grant a credit facility is worked out on a scoring system individual to each lender.  This system is used to determine if you are a low or high risk borrower and if you are likely to be at risk of defaulting and not making repayments. The better you have been historically at paying your bills, paying back any loans you may have had and generally paying anything granted on a credit basis in  timely fashion, the higher your credit score will be.  Conversely, if you have defaulted on your mortgage repayments, not paid your water bill and are behind with your mobile phone payments your credit rating is very likely to be low and you will find it very unlikely that you will be offered a loan or any form of credit.   It is the lenders job, be they a bank, credit card company or loan company, to lend money responsibly so the lower your credit score the less likely they are to grant credit facilities. One of the myth's of the credit scoring system is that everyone has an individual rating and there is a magical number that once you get past, you will be granted credit. That actually isn't true, companies will individually lend you money if they want to, they will simply use your credit rating as a guideline.  So it stands to reason that the better it is, the more credit worthy you will seem.

Any time you try to buy something on a 'buy it now' and 'pay September' kind of deal or you approach a loan company to borrow money, more likely if its an unsecured loan by the way, you can pretty much guarantee that your credit file will have been examined for any hint of irresponsible borrowing behaviors.  The bad thing is that, every time a company makes a search for your credit score, it leaves a footprint.  If credit is refused, although other lenders don't know that, it increases the chances that it will be refused again if you have lots and lots of applications and searches on your file. It very much pays to not only be selective when looking to buy something on credit or borrow some money but to make sure that historically you have made the payments you should have been.

One of the best things you can do is get an up to date idea as to what your credit rating or credit score is today.  It saves a lot of time and hassle and will stop you making unnecessary applications to loan companies, etc if they are going to be poorly received, therefore leaving yet another application or 'footprint' on your file. A few of the companies out there will offer a free thirty day trial in which you can receive a copy of your credit file.  Take a look on the web and get a credit report done today - it could be one of the most useful things financially that you will do.