We all know that when we approach a lender for money – regardless of the particular loan or the purpose for which it will be used – the lender qualifies us (or disqualifies us) based upon a number of different factors. Essentially lenders are called upon to establish our creditworthiness – the likelihood that we are going to repay the loan amount on time and in good standing. And nothing speaks to the likelihood of our future behavior like that of our past actions; something that is very clearly communicated in our credit report.

Our credit report is the entirety of our financial life – including the loans we have procured in years’ past, the loans we applied but for which we were turned down, the number of times we made late payments to particular creditors, the number of years that accounts have been open, which accounts have been closed, the amount of credit we have extended to us presently and how much of that has currently been used, any loan defaults, bankruptcies, and judgments that have been leveled against us, and a variety of other information that is all used to ultimately calculate our credit score – the three digit number that tells potential lenders at a glance if we are considered a good credit risk or too much of a risk.

And, of course, there really isn’t just one credit report but rather, three as generated by each of the three credit bureaus that are ultimately responsible for collecting the information that is then yielded in their report. As consumers we have the right to see what potential lenders are seeing when they go to qualify us for a loan, and subsequently we are entitled to receive a free credit report from each of these three bureaus each year.

This has always been an important right to take advantage of for obvious reasons but today it is even more important as our credit score is currently being given more weight than ever in this tough lending market.

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