What Exactly Is A Credit Check?
A credit check is what a potential lender performs to decide whether or not to extend credit to you, and under what terms. It is a quick way for a grantor to decide upon your creditworthiness. The potential creditor reviews your credit report that is compiled by the credit bureaus. Your credit report will have a FICO number (known as your credit score) and other personal and financial details. Creditors report on people they lend money to. This history of payments, loans, defaults, delinquencies and the size of the debt determines your FICO score.
When a credit check is ordered the potential lender can see a complete history of all your financial dealings, and how responsible you were in the repayment. They also see just how many times you’ve applied for credit recently.
By the way, a personal credit check is different from a business credit check
Who Looks After A Credit Check?
Any time you’ve ever applied for credit, from a simple loan or a credit card, or attempted to obtain financing for a car or electronics, the lender will perform a credit check. The three big credit bureaus are Equifax, Experian and TransUnion. These are well established sources for performing a credit check. That being said, many of the items on your credit report can be wrong. It is reckless and foolish to not check your report to make sure it’s correct.
Any individual can request report by submitting a written request to a credit bureau through the mail, or you can order your report online. Unfortunately, there are mistakes on a lot of credit reports. By performing a credit check BEFORE you apply for a major loan, mortgage or credit card you can save yourself from potential problems.