A Credit Report is the record of financial information of an individual or company taken place on credit in a financial year. The report contains all detailed information about credit borrowings, repayment, late payments, and any bankruptcy claim. How the report turns out is instrumental in building an individuals credit reputation. This means whether the person will be able to receive any credit in the future, depends on the report. Also, if the report is too bad, the person has to seek remedial measures like debt consolidation and short sales. Ideally, the procedure goes like this - the person fills out application form from a bank or credit card company and this information is forwarded to designated credit bureau. The task credit bureau has is to match the information given by the person to the file records.

 This record acts as informative store for lenders to determine the repayment capability of a concerned person. On the basis of all these accumulated date, the credit report is prepared and given to the person. Credit Score The formation of the score is based upon the report. It is the statistical expression of the report of the person and shows the credit worthiness of the same. The score is prepared by credit bureaus along with the report or if the person sends in a separate request.

What is the purpose of credit score?

 The credit score is used by banks and financial institutions to decide whether the person applying for loan has actual repayment capability or is the bank going to run into losses. Private moneylenders need the credit reports to ascertain whether the person can pay according to the accepted interest rate and what credit limit should be posed. Also, the credit score also determines the revenue generation capacity of the person. Not only banks or financial institutions ask credit score, mobile phone companies, landlord agreements, employers and other also need them. There are separate levels in which the report is shown and each point level has significance. Check this American Credit Report service Have a nice day