Credit Reports

You can no longer put off renovating your kitchen. The fridge makes all food resemble a science experiment, the dishwasher is nothing more then a drying rack and the floor has linoleum circa 1972. You have worked out a budget and now just need to secure a personal loan, but arent sure what type of information will be needed for the personal loan application process.

The first thing to realize is that there are personal loans can be either unsecured or secured. Based on which one you prefer, each one requires different information for the loan process.

Unsecured loans are loans offered without the borrower needing to offer any type of collateral. Applicants need to provide their complete name, income verification, social security number, job status and banking status. A full credit check is typically not required for this type of loan and the money is offered to a consumer in good faith. Because these types of loans carry a bigger risk for the lender, the interest rates will be higher, repayment schedules tighter, and additional fees will be applicable.

Secured loans are offered when a borrower has some type of backing collateral. These loans tend to have significantly lower interest rates but much stricter verification policies. Applicants for a secured personal loan will not only need to provide their full name, social security, banking status and income verification but they can expect a full credit check and may need to provide additional paperwork proving their assets.

When choosing between an unsecured and secured loan for your kitchen renovations (or whatever expenses that need financing) it is important to thoroughly investigate and weigh the pros and cons of both. Those with bad credit scores tend to take advantage of unsecured as they are more easily granted, however the interest is significantly higher. If you have a decent credit history and collateral, a secured loan may be better as it will cost less money in the long run. Once you decide on the loan, make sure to check with the loan officer and confirm what will be verified during your personal loan application.

Your credit report is a record of information collected from your creditors, which summarizes your credit history. When you apply for a line of credit - your bank, credit card company, or mortgage lender uses your credit report to evaluate the potential risk of lending money to you. Employers, landlords, and insurance companies may access this information as well.

In your credit report, the lender will find out what credit card accounts and loans you have, whether they are in good standing, and whether you make payments on them in a timely manner. If there are any actions taken against you because you didnt pay your bills, or if a company had to write off a debt that was not repaid by you - that will be on your credit report. Delinquent debts will remain on your account for seven years unless the creditor chooses to remove that debt. A Chapter 7 bankruptcy will remain on your credit history for 10 years. A Chapter 13 bankruptcy remains on your credit record for 7 years. In either case, your credit score will plummet, and you will not be able to get any type of credit during that time. Matters of public record, such as a tax lien or foreclosure, may also appear on your credit report.

However, there are certain things that cannot be on your credit report, and is not accessible by any of these inquirers. The following describes the types of information that is not included in your credit report.

Medical information. Unless you give your consent, this information will not be revealed to potential inquirers.

Notice of a Chapter 11 Bankruptcy that is more than 10 years old.

Any debts that are more than seven years old, including delinquent child support payments.

If the inquiry is from an employer, the credit bureaus cannot provide any identifying information regarding age, race, or marital status.

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