A credit report is a readable presentation of your financial data that’s stored in an electronic file at one or more national credit reporting agencies (Experian, Equifax and TransUnion). The information in a credit report may be used to determine your eligibility for loans, mortgages and other credit. It also can influence employment decisions, insurance rates and utility deposits.
What is a credit report?
A credit report is a detailed, objective account of your financial history that lenders and other businesses access to assess your creditworthiness. Credit reporting agencies, such as Equifax, Experian and TransUnion, compile information provided by companies that grant you credit (like retailers, banks and credit card issuers) and public records like bankruptcies, court judgments, liens and foreclosures.
Credit reports serve as the raw data used to generate your credit scores, which can affect whether you’re approved for a loan or credit card and determine your terms. They contain a range of personal information, including your name and addresses, how often you use credit, and how much you owe on open accounts like loans, bills and credit cards.
Also included are the number of times your credit has been accessed and the types of inquiries made; both hard and soft (like when you check your own credit or when businesses you already have a relationship with make a prequalification request). Any financial issues that appear on your report, such as liens and foreclosures, can stay on it for years.
How is a credit report made?
A credit report is a detailed, objective account of the financial situation and payment history of a consumer. It is prepared by a credit bureau (Equifax, Experian and TransUnion) using information collected from creditors and other companies that have a relationship with the consumer. The credit bureaus then create a simplified numerical representation of the consumer’s financial reliability known as a credit score.
A lender will request a credit report from a credit bureau when it considers lending you money or extending your credit. The CRAs pull the information in your file, which includes your identifying information, information about debts and accounts you own, the balances on those accounts and how much of your credit limit is being used, known as your credit utilization ratio.
Your bill-paying track record carries the most weight in your credit scores, and is generally determined by how many days past the due date your lenders have reported you as late on your payments. Also considered is the amount of time since you were last late, and the frequency of any recent late payments.
What information is on a credit report?
Your credit report contains financial information that lenders use to assess your risk. It also includes personal identifying information, details on your existing accounts, public records (including bankruptcies), and inquiries from companies that have viewed your report.
Identifiable information on your report includes your name, including any aliases or misspellings reported to creditors, your date of birth and Social Security number, your current and previous addresses, phone numbers and employer information. The three credit bureaus, Experian, Equifax and TransUnion, each compile information from sources that extend you credit to create your report.
The report includes a list of accounts, both revolving and installment (auto loans, mortgages and consumer debt), the dates they were opened and their current status, which could be open or closed. It also displays a history of on-time and delinquent payments. Public records such as legal judgments, tax liens and foreclosures are listed too. The report also documents each time someone has viewed your report, called an inquiry. Inquiries that you initiate (consumer-initiated inquiries) and those from pre-approved credit offers don’t count against you, but a lender’s inquiries may.
How can I get my credit report?
A credit report can determine whether you get a loan, mortgage, or credit card, and it influences how much you pay in interest. It can also impact your chances of getting a job or renting an apartment, and it’s important to check your report for errors.
According to federal law, you can get one free credit report a year from each of the three national credit bureaus: Equifax, Experian and TransUnion. You can request them at the same time or stagger them throughout the year.
To get your free credit reports, visit the websites of the credit bureaus. Then click on the button near the top or bottom of the page that says “Request Your Free Credit Reports.” The process is quick and easy, and checking your reports doesn’t affect your credit scores. If you spot an error, contact the credit bureau and creditor directly to dispute it. The credit bureau must investigate your dispute and remove inaccurate information from your report.