What Is a Credit Report?
Key points about: consumer credit reports
Your credit report contains information about your credit history, including current and former accounts, debts, and inquiries.
It’s wise to address issues on your credit report as soon as you find them to avoid affecting your credit score.
You’re entitled to credit reports from each of the three major credit agencies weekly through December 2023 and annually after that.
If you’re planning to apply for a new credit card, you might want to look at your credit report first. Credit card companies, and other lenders, consult your credit report to determine your likelihood to repay debts on time. By addressing any issues before you apply for a credit card, you may improve your eligibility and the interest rate you may be offered. If you’re unsure how to check your credit report, or simply wondering what a credit report is, read on to learn more.
Definition of a credit report
A credit report is a document that contains information pertinent to your creditworthiness, like your credit accounts, mortgages, debt, and your payment history. Financial entities like banks and credit card companies report relevant information to credit bureaus, also known as credit reporting agencies, to develop credit reports. The three major credit reporting agencies are Experian, TransUnion, and Equifax.
Companies like the Fair Isaac Corporation (FICO) use algorithmic models to transform your credit reports into credit scores (like the FICO® Score1). Those scores range from poor to exceptional and give lenders an idea of your likelihood to repay loans at a given time.
Information in a credit report
Credit reports vary across the three bureaus because credit reporting agencies present their credit reports differently and also commonly receive different data from lenders at different times. However, the information they each contain typically falls into the same categories:
- Current and previous credit accounts: Credit cards, mortgages, auto loans, student loans, personal loans, and other lines of credit all appear in your credit report. Your report will likely show when you opened and closed the accounts; your overall payment history, including missed payments; your balance; account types; and specific lenders.
- Personal and identifying information: Your credit report includes any names you use on credit accounts, your current and prior addresses, employment information, phone numbers, and social security numbers.
- Bankruptcies: Previously, public records, including tax liens, civil judgments, and bankruptcies, could all appear on your credit report. According to the Consumer Financial Protection Bureau, since 2018, the only public records included in reports are bankruptcies.
- Inquiries: When you apply for a loan or a credit card, and the lender views your credit report, it triggers a hard inquiry. On the other hand, a soft inquiry occurs when you or someone you’ve authorized (like a possible employer) checks your credit, or when a lender looks to pre-approve you. Only hard inquiries affect your credit score, but all inquiries appear when you check your credit report.
Information that isn’t in your credit report
Only information related to your creditworthiness should show up on your credit report. Personal details that don’t appear in your credit include your medical history, criminal background, race, ethnicity, marital status, income, or bank account information for checking or savings.
Why it’s important to have accurate information in your credit report
Your credit score not only helps determine what loans you qualify for, your credit limit, and your interest rates; it plays a role in most facets of your life. Phone plans, insurance policies, apartment or house rentals, internet service, and more may require credit inquiries. Some employers may even conduct a credit inquiry on you to make hiring decisions. Inaccuracies on your credit report, therefore, may have serious consequences. Errors like duplicate accounts can increase your credit utilization and hurt your credit score.
When you review your credit report, note any mistakes, changes, and information you don’t recognize. That way, you can take immediate action to address these issues with your creditors and the credit bureau and repair any damage.
How to read a credit report
All credit reports might look a little bit different. However, they all contain similar information and have comparable structures.
One section of your credit report contains your identifying information. Look closely and make sure your name, social security number, and address history don’t have any errors.
Another section should contain all your loans and credit card accounts. A sparse or blank section usually means you don’t have any credit history. Otherwise, you could see plenty of information under each account, including the balance, monthly payment history, when you opened and closed it, and more. If you have a long credit history, it may be wise to comb through this section carefully.
Did you know?
Your credit card activity will appear in your credit report and may be an important part of determining your credit score. Your report will likely show the dates you opened and/or closed an account, your payment history, your balance, and more.
Bankruptcies and accounts in collections appear in their own section. You may not recognize the name of a collection agency that currently holds your credit account, especially if they recently purchased your debt. If you’re unsure, you could contact the collection agency to verify.
The final section lists everyone that has recently looked at your credit report. Inaccurate inquiries could indicate that someone has tried to open accounts under your name, so make sure you contact the credit bureau quickly if you see any inquiries that look wrong.
How to get a free credit report
The Federal Trade Commission (FTC) states that under the Fair Credit Reporting Act, all Americans have a legal right to access a free annual credit report from each of the three major credit reporting agencies. Due to the COVID-19 pandemic, the credit bureaus launched a program that allows people to view their free credit reports from all three credit bureaus each week through December 2023, according to the FTC. You can request each free weekly and annual credit report on AnnualCreditReport.com, and view them online after answering some security questions or have them mailed to you.
Your credit report gives businesses and creditors insight into your credit background before they lend to you. Whether you’re applying for a new credit card or working on improving your finances, it’s wise to check your credit report often. That way, you can avoid surprises, resolve inaccuracies, and improve your credit to get the best credit card for your unique circumstances.
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