Annual Credit Report: Important for the borrowers

Annual credit report refers to a person’s credit report of the whole year which contains accounts of his financial transactions of the whole year. An individual should secure his credit report to remain aware of his credit status.

Credit report is prepared by the financial bureaus, especially by Experian, Equifax and Trans Union. Credit report is created taking records of transactions made by the concerned borrower. The credit report contains amounts of loans he has secured over a year, accounts of reimbursement (payment and non-payment of the loan amount, less payment, late payment, arrears, defaults etc). Credit score is assessed on the basis of the credit record. A borrower with less than 600 credit score as per FICO is said to have spoiled his credit history. His loan application is generally refused by the lender. Again, landlords and employers want to verify the credit score of the would-be tenants and staff respectively.

One important thing about the annual credit report is that sometimes it contains errors, errors occurred when the financial bureaus employees prepare the credit report. It happens that they make some wrong entries by mistakes and the credit report is adversely affected producing wrong credit score. It happens that the staff of the financial bureaus misses some payment figure to enter or uses one’s entry to another’s credit report. This is why the borrower must check his credit minutely. If he detects any mistake, he should take the same to the notice of the employees of the bureaus and get the mistake rectified.

It is the duty of the financial bureaus to correct the annual credit report accordingly. They must send a copy of the corrected credit report to the borrower and a copy to each of the lenders who have been in transactional contact with the borrower within the last one year.

The borrower may find that his credit score has no bearing of ill-health after the corrections are made. He can then secure finance at favorable terms and condition. He may also find that he should take steps to improve his credit score. The borrower has the legal right to secure his annual credit report and he can secure it from the financial bureaus and from other financial agencies.