Personal information is also in your credit report, such as: your name, your address, most recent previous addresses, telephone numbers (even if they are unlisted), your Social Security number, when you where born, and info about your employment history. Your credit report also contains issues of public record such as bankruptcies, tax liens, and civil judgments.

At this moment, three large national credit bureaus dominate the credit reporting industry: TransUnion, Equifax and Experian. These credit bureaus run around 1.3 billion credit reports annually, and each of the three bureaus has approximately 225 million consumer credit files on record.

A credit report also includes a credit rating (your FICO score) FICO scores span from about 300 to 850 with an US median (midpoint) around 725. FICO scores above 720 are considered a "good credit" rating, while any FICO score below 600 is considered to be a poor rating.

As an example of how your credit rating can impact you consider a mortgage of $216,000 amortized over 30 years. Assuming you have the minimum FICO score (620 to 639) to qualify for the mortgage you would pay 8.13% or $1605 monthly, however if you had the biggest FICO score (760 to 850) you would pay 6.54% or $1371 monthly. This equates to a $234 savings a month, or $84,240 over the lifespan of the mortgage.

How can you improve your credit rating? While there are minor differences between methods your FICO score is calculated the standard formula is:

• 35% on your payment history.
• 30% on how much you owe.
• 15% on the duration you've had a credit history.
• 10% on the amount of new types of credit you've asked for.
• 10% on the types of credit used.

Understanding this, you can figure out to enhance your FICO score you'll need to; pay your bills on time, lessen the amount of debt you owe, limit your requests for new credit and stay away from higher risk credit.

Check out the credit-bureau operated Annual Credit Report to get a free copy of your credit report from every credit reporting organization. In the U.S.A. a federal law the FACT Act (Fair and Accurate Credit Transactions Act), entitles every legal U.S. resident to one free copy of their credit report from each credit reporting agency once every twelve months. However, this report does not contain credit scores.

Inspect your personal information for errors like your name being wrong (e.g. maiden name listed but not married name), wrong address both present and past, right social security numbers and so on. Also review your financial information for such things as loans with a balance due even though paid back, and credit cards or additional accounts you have cancelled. The more factual your reports are, the less questions a loan company will be forced to ask, so make sure you report all errors and have the mistakes fixed ASAP.