A credit profile is a report that shows a person’s credit history, including credit accounts, payment history, and employment history. It is used by lenders and others to determine creditworthiness. It is important to maintain good credit and regularly review and correct any errors. Separate business profiles should be created to avoid personal credit affecting the business. Beware of credit repair services.
A credit profile is a document that provides information about someone’s credit history. Credit profiles that offer credit are used by lenders and other agencies to determine someone’s creditworthiness, and are also used by potential homeowners and others who might be interested in someone’s credit history. Good credit will make it easier for someone to access credit, while bad credit can become a major roadblock.
The profile includes a complete history of the credit accounts someone has opened or maintained in the past, along with information about their limits, the balances on record, and the person’s payment history. The maximum recorded on each account will be listed, as well as information about late or incomplete payments. Old accounts are eventually removed from a credit profile after a set number of years, usually seven.
A credit profile also often includes information about someone’s employment history, along with listings of any inquiries made about someone’s credit. If, for example, someone applies for a loan to buy a car, the lender’s inquiry will show up on their credit report, and another lender will be able to see that an inquiry was made. Inquiry history can be used to determine whether or not credit was extended to someone, or to alert the person reviewing the report that a new credit account may be in the process of being opened.
Credit profiles can be found for individuals and businesses. People who are just starting businesses should take steps to create a separate business profile. This ensures that personal credit black marks won’t count against the business, and can lead to access to business loans and other types of accounts that are only open to businesses, not individuals. Both business and personal profiles should be reviewed regularly for errors, and if errors are identified, a correction request should be submitted.
The best way to build a credit profile is to stay current on all credit accounts, making payments on time and in the amounts required, or in excess of the minimum. It’s also a good idea to avoid carrying a balance of more than 50% of someone’s available credit in one revolving credit account, and to avoid opening two revolving credit accounts, as this can make someone look like a credit risk. Consumers should note that agencies that claim to “fix” someone’s credit are often highly questionable, as activities that tamper with a credit report can generally only be done by the person to whom the profile refers.
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