A credit report is basically a consolidated account of your previous borrowings and repayments. Every time you borrow, pay or delay, it will be reflected in your credit report. Money lenders use it to assess how much of a risk it would be to lend to you.

A good credit report is confirms that your finances are in order. It says that if you are given a loan or a credit card the you should be able to pay back what you have borrowed.

Credit reports work through issuing a credit score. They will compute your borrowing and repayment against the how long it took you to repay and come up with a score which ranges from 300 to 850.

The higher it is, the better it is for you. It means that you are more likely to be offered a loan, a credit card or a mortgage. If it’s low, it means that your application for borrowing money is unlikely to be accepted.

If you have a credit score of over 700, you are in excellent credit health. If credit score is below 600, then you need to improve your credit health by paying your debts off.

So, why exactly is it important to be have a good credit score?

- Once you have gotten yourself a healthy credit score, it means easy access to more finances. This could be a car, an apartment, or even just a simple bank loan for your business. These days, it’s practically impossible to mortgage a house with a bad credit score.

- If your credit score is favorable, you’re considered to be a reliable person who promptly takes care of their debt. This encourages vendors to give you better deals. You may find yourself getting healthy discounts and longer repayment periods.

- When applying for a job, employers may do a credit and background check on you. Applicants with high credit scores are in an advantageous position, as they are seen as being more honest and reliable.

- One of the most important and little known values of a credit report is that it can be used to track identity theft. If someone steals your identity, and uses it to take out finance, it will show on your credit complete credit report will even highlight unusual items for your attention.
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