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When you want to make a large purchase such as a car or home, or even a TV, then the chances are you are focusing on the item you want to buy itself, rather than the way in which you are going to buy it. You will be absorbed with the exciting features of your potential purchase and are not looking at how you are going to arrange the loan or mortgage so you can buy the item you desire.

Most people who need credit in order to buy one of these items are not really aware of how worthy their credit score is. If you are uninformed about this aspect of your finances then you’re potentially going to lose a great deal of money when you finance a big-ticket item.

A credit score is something that you have been assigned based on your credit history. When you want to take out a loan the company lending you the money is going to look at your credit report to determine whether they are able to lend you money, how much money they are able to lend you, what interest rate they will lend it out at, and any additional fees they want to apply to you.

The people who have very bad credit then lenders are not going to want to give them any money at all. If you have bad credit rating that is neither exemplary, nor terrible, then the score is going to determine what interest rate they lend money to you at. This is because if you have a poor credit history then you are seen as a greater risk for the lender and they want to insure against this risk by charging you more. They are also less likely to lend you a large amount of money as they fear you might default on it.

Your credit history will detail any bank accounts that you have and any loans you have taken out. This will include car loans, mortgages, credit agreements, bank accounts and others. All of this information will be considered by the lender, balanced, and they will come to a decision about whether they can loan you money, and how much they can give.

The problem is one or more of the credit reporting agencies may hold inaccurate or our of date information. This is why it is essential that you take a look for yourself using a free credit check to see if there are any inaccuracies that need to be addressed.

The credit report also let banks know whether you have mortgages elsewhere and whether you are struggling to meet these payments or not. If you are, the chances are they are not going to extend you additional credit.

There are some aspects of your financial life which are not listed in your credit reports because of your right to privacy. For example, lenders are not allowed to see information about your employment history or how much you earn. For those people who have student loans these are also not included in your credit report.