When evaluating your credit report, you will get full information about your payment history, the amount you owe, the credit accounts that exist, inquiries, and much more. There are, however, certain factors that are not contained in credit reports but can affect people’s financial status as well as their creditworthiness. Below are five instances of critical data that are not available from commonplace credit reports.
Utility Payment History
As for the credit report, it will not reflect whether you can pay the utility bills on time or not. These are the bills for things like electrical power, water, garbage collection, cable television, Internet connection, and telephone service. Paying these bills late or untimely does not have a way of leading to collection or other severe repercussions; however, it can allow utility providers to require security deposits for the continuation or further use of services. While occasional non-payment may warrant the service being shut down, not paying any of the utilities at all can have your service disconnected. Credit reports do not indicate utility payment history and for this reason, the firms conducting credit checks cannot verify it when considering your credibility.
Rental Payment History
Details such as your payment record regarding rent, whether you were regular or had defaulted are also not captured in credit reports. To reduce defaulting tenants, landlords can conduct credit checks on the applicants but there is no record of rental payments on a credit report. Non-payment for rent or paying it after the due date can result in eviction and subsequent credit checks showing this would mean that one cannot easily find a house to rent. It is not common to report rental payment history, but there are companies like RentTrack that provide the service of rental payment reporting to ensure positive reporting of tenants’ records as is done with credit reporting.
Bank accounts, which include current, savings, and fixed deposits, are the key components of the analysis of financial positions and activities.
Traditional credit reports provide no information on checking and saving accounts. This includes balance, deposit, withdrawal, over-draft, or any fees that may have been incurred. However, reduced account balances and past instances of over-drafting would mean high risk to some lenders conducting credit checks to an applicant. Additionally, lapsing in account management can see banks close your accounts or even block you from using their facilities. Although accounts are not reported in credit reports, it is possible to know if the lenders check the balances or activity with the banks during loan processing.
Past Criminal History
Several factors are reported in specialty consumer reports from screening firms and they include arrests, convictions, bankruptcies, and civil judgments. But general credit reports contained from the nationwide credit bureaus do not include any criminal records or specifics of any court case. However, some housing providers and employers have been known to conduct formal assessments of their prospective tenants or employees to determine their criminal and court history even if the applicants meet the standard requirements. But you are wrong, as past criminal history can prevent you from renting a home, getting a job, getting a loan, or getting anything you want in life since it is not included in your credit report.
Medical Debts
Starting from the middle of 2022, paid medical collection debt will no longer be reported to the market standard credit reporting agencies. It will take a minimum of one year before any unpaid medical bills are reflected in the credit score. This change would seek to avoid a situation where the credit score of a consumer is negatively affected by medical emergencies and billing disputes. Nevertheless, credit reports still comprise nonmedical debts in the collection which persist in pulling down your score. Still, if a borrower has submitted specialized reports to the lenders, they may find medical debts included in the list. As for now, while medical collection accounts are no longer very common in credit reports, they can still indicate certain payment issues.
Monitoring Credit Reports remains important
Still, when it comes to credit reports, some details are missing that are essential for the financial aspect: Nevertheless, credit reports can still be extremely useful to review. The prevention of mistakes and fraud also makes your score increase and leads to better financial situations. Realize that getting your free reports annually and analyzing changes monthly is the right approach. It is also important to go further and ensure that one provides positive references to the firms that conduct tenant screening when searching for a house. They can also apply, a high balance in the account and a clean record with the bank. Finally, not engaging in activities that summon civil judgments, debt collections, and criminal charges helps retain a clean credit score.
Despite some weaknesses, credit reports remain an essential tool that helps to build a solid credit history, avoid potential loopholes, and get the best loan and housing rates and conditions. Utilize any financial instrument possible to provide evidence that you handle funds with responsibility. Of course, businesses want full views of the responsibility, not just the snippets from the credit reports. The management of resources as they are available contributes to the positive profile you need.
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