credit report
A detailed record of a person's credit history compiled by credit bureaus, including payment history, debt levels, and account types used by lenders for credit decisions.
Example
“She discovered an error on her credit report that was lowering her score — a disputed charge-off she had never missed paying.”
Memory Tip
CREDIT REPORT = the detailed file. Credit SCORE = the number derived from it. Check yours for free annually.
Why It Matters
Your credit report directly affects your ability to borrow money, the interest rates you receive, and sometimes even your eligibility for jobs or housing. Lenders use this report to decide whether to approve loans and at what terms, making it one of the most important financial documents you have.
Common Misconception
Many people believe that checking their own credit report will lower their credit score, but this is false. Checking your own report is a soft inquiry that has no impact on your score, while only hard inquiries from lenders requesting credit actually affect it.
In Practice
Sarah applies for a mortgage and the bank pulls her credit report, finding a payment history showing she was 30 days late on a credit card three years ago. Because of this negative mark, the lender approves her for a $300,000 mortgage at 6.5 percent interest instead of the 5.8 percent rate offered to borrowers with perfect credit, costing her thousands of dollars in additional interest over 30 years.
Etymology
CREDIT (borrowing history) REPORT (documented record). A REPORT documenting CREDIT history.
Common Misspellings
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