What is the main purpose of a credit report?

The main purpose of a credit report is to provide a detailed account of an individual's credit history. This document contains information about an individual's borrowing and repayment activities, including credit cards, loans, payment history, outstanding debts, and any public records related to credit, such as bankruptcies or liens. Lenders, banks, and other financial institutions use credit reports to assess an individual's creditworthiness when making decisions about loan approvals and interest rates.

By summarizing an individual's financial behaviors over time, a credit report serves as an essential tool for understanding how responsible a person has been with credit, helping to predict future repayment behavior. Having accurate and comprehensive credit reports is crucial for both consumers and lenders, as they influence the ability to secure financing and the terms associated with different credit products.