MODULE 12:
Understanding credit reports
and scores
What are credit reports?
A credit report is a consumer report that looks at some of your bill paying history, public record
information, and a record of your applications for credit. Your credit reports shows information
about how you have used credit, such as how much credit you have, how much of your available
credit you are using, whether you have made your payments on time, and whether anyone has
sent a delinquent (late) debt you owe to a debt collector.
Why do credit reports and scores matter?
Some people think credit reports and scores don’t matter to them, because they never want to
get a loan. But many people and businesses use reports and scores to make decisions about you.
A bank or credit card will use them to decide whether to give you a loan or offer you a
credit card.
A credit card company may use them to decide what interest rate you will pay on your
future charges if you are approved.
A landlord may use your reports or scores to determine whether to rent an apartment to
you.
In many states, an insurance company may use your reports or scores to determine
whether to give you insurance coverage and the rates you will pay for coverage.