Your credit report is a record of past borrowing and repayment. It includes information regarding any late repayments you have ever made, and whether you have been declared bankrupt in the past. A financial institution such as a bank will review your credit report if you approach them for a loan or credit card, to assess the risks involved in lending you money. A credit report indicating you are good at making repayments on time and have not been bankrupt is likely to encourage the bank to lend you money, at a low rate. However, if your report shows a poor credit history, they will lend money at a higher rate — or may refuse to lend you money at all.
You can download your credit report from the Internet. Advantages of downloading your credit report include being fully aware of your credit history, and knowing how likely it is that you will be able to borrow money at a reasonable rate. Keeping track of your credit history is sensible as it helps ensure your future financial health — by observing where you have gone wrong in the past, you can avoid making the same mistakes again in the future. For example, you may have missed a small payment in the past, not realising it would damage your credit rating.
If you think you may want to borrow money in the future, it is definitely a good idea to download your credit report. It will enable you to efficiently plan your financial future, as it will indicate whether or not it is probable a bank will give you a loan at a good rate. It is a particularly useful tool if you are planning to start a business, because you will probably need to borrow large amounts of money in order to make investments. In addition to this, reviewing your credit report is helpful if you want to purchase something like a new car. You may be put off if the loan you have to take out will have a high interest rate.
Downloading your credit report will aid you in making sensible decisions regarding your future lending. If in the past you have not made repayments on time (and thought little of it) it will highlight the important of doing so. Make sure you see what your potential future creditors will look at to determine your credit worthiness.