A credit report is the consolidated record of your borrowing and repayment history. Whenever you borrow, pay or delay, the details are added to your history. Lenders use this to determine how much risk it would be to extend credit to you.

A good credit history confirms that your finances are in order. It confirms that if you are given a loan or a credit card then you should be able to pay back what you have borrowed.

Through your profile you will be issued a credit score. They will compute your history of payments with other criteria and come up with a score of between 300 and 850.

The higher your score, the more financially stable lenders consider you to be. It means that you are more likely to be offered a loan, a credit card or a mortgage. If your score is low, it means that your application for borrowing has a high chance of being rejected.

If your credit score is over 700, you are considered to be in excellent credit health. If credit score is below 600, then you need to improve your credit health by paying your debts off.

So, why exactly is it important to be have a good credit score?

- Once you have a good credit score, it means easy access to more finances. This can be a store card, bank loan or a car. Today, it’s practically impossible to mortgage a house if you don’t have a good credit score.

- If your credit score is above average, you’re seen as a reliable person who pays back what you borrow. This encourages lenders to offer you better deals. You may find yourself getting healthy discounts and longer repayment periods.

- When applying for a new job, most employers will do a credit and background check on you. Applicants with high credit scores are in an advantageous position, as they are considered to more reliable and honest.

- One of the most important and little known values of a credit report is that it can be used to track identity theft. If anyone steals your identity, and uses it to take out finance, it will show on your credit report. A [spin]thorough credit report will in fact flag unusual items for your attention.
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