When you get credit reports free you have most, if not all, of the information that creditors
use when deciding if to grant you credit. Some credit decisions are made strictly mechanically
with the use of a rating system that gives your credit a single number score. Other creditors
are more subjective and will try to look beyond the numbers to gauge what type of person and
credit risk you are. But no matter how it's done, creditors look for certain characteristics
when granting credit. And when you get credit reports free, knowing what creditors look for can
help you assess your credit.
The three traditional characteristics that creditors rate when judging your credit are
capacity, character and collateral. And when you get credit reports free, you can read them with
these characteristics in mind.
Getting credit starts with having a source of income to repay a debt. And creditors want
to know how much you earn, how you earn it and how long you've been making your present income.
They'll also check your expenses to see what current and future bills you'll be responsible for.
Creditors want to know not only can you pay off a debt, but will you. To judge your character,
creditors look at your credit history. Some people may have the income to afford the debt, but
may not have the budgeting ability to always pay their bills. So a creditor will check your
bill-paying record. He'll also look at the stability of your work history and how long you've lived at
your current address.
After determining if you can and will repay the debt, a creditor wants some further risk
insurance in the form of collateral. He'll want to know what assets you have that could cover
the debt if you lost your income. Sometimes the credit sought is for the purchase of an asset
which can by itself cover the debt, such as most real estate.
Although creditors use a variety of factors when judging an application, there are some
things that are against the law for them to consider. The Equal Credit Opportunity Act says
that creditors can't use your age, race, sex, religion, national origin or marital status to
deny you credit. Nor can they use any of these characteristics as a basis to offer you less
favorable terms or to close an existing account.
To get credit reports free and 30 days of credit monitoring free, please go to
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