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If you are interested in acquiring money from a bank, an automobile lender, a department store, or any other creditor, all will want to learn what type of person you are as reflected by your history of credit. Lenders want this information so that they can assess the degree of risk involved in lending you money. Are you the type of person that meticulously pays all outstanding bills on time? Do you have a history of paying bills late or not at all? What amount of debt load do you currently carry? How much debt can you reasonably handle based on your income, and are you able to pay off the interest? All of these are very important details for lenders to know before offering you credit. This is the type of information that is reflected on your credit reports, and this information will determine whether you can access bank credit or not.

This credit reporting system would work very well if it was 100% accurate, 100% of the time. The fact is, it isn't. The U.S. Government is aware of these problems, but to date has done little to resolve them. Coupled with the fact that Credit Reporting Agencies, the ones responsible for compiling your credit reports, are under no obligation to check their facts for accuracy prior to sending out your reports, makes the problem that much worse. Only when you, as an individual, request copies of your credit reports and review them for inaccuracies, then take the multiple and often complex steps required to prove they are inaccurate, are the CRAs obligated to fix them. So much for innocent until proven guilty! Banks and other creditors do not check the reports for accuracy either.

Unfortunately, inaccuracies are common. It is well documented that details can appear on an individual's credit report that have nothing to do with them, or that are altogether false. It is absolutely imperative that all individuals request copies of their credit reports and review them on a consistent basis to ensure they are accurate. It is difficult enough to learn that you don't qualify for credit, let alone to find out that there is no valid reason why you don't.

Understand that you have the right, if you've been declined bank credit, to ask your banker the reason why. In addition, once you've obtained credit from a bank, stop to inquire why you are paying the interest you are. Ask if your bank will lower your interest rate, and if they won't, ask why. Bankers should not be afraid to tell you what your credit score is, and how your score has impacted the amount of bank credit you're authorized to obtain, and the interest rate you pay on that credit. You cannot begin to prove to banks and other lenders that you are a safe risk if you don't know the extent to which and why they think you pose a credit risk. Knowledge is power.

You can learn how to request free annual copies of your credit reports on our credit reports page.

Fair access and opportunity to secure bank credit is protected by a number of consumer credit laws, including the Equal Credit Opportunity Act and the Truth in Lending Act. These laws seek to ensure that opportunities to access bank credit, mortgages, and other loans aren't impacted by discriminatory lending practices and that consumers receive full and fair disclosure of the conditions involved in any lending arrangement.