Your credit report is a record of your financial history that is used to compute your credit score. It includes your identifying information, account details (credit cards, mortgages and loans) and payment history. It also shows inquiries, public records such as liens and bankruptcies and debt collection accounts.
If there are errors in your credit report, you have the right to dispute them.
It’s a record of your credit history
Your credit report is a detailed record of how you’ve handled your debt in the past. It summarizes information about your credit accounts, including their types (revolving or installment) and whether they are open or closed. It also includes your credit limit and your payment history for each account. The three major consumer reporting agencies – Experian, TransUnion and Equifax – collect this data from sources that extend credit. They sell it to businesses that decide whether to grant you a loan, offer insurance or rent or buy your home. If there’s any incorrect information in your report, you can ask the credit bureau to correct it.
Your credit report also contains public records, such as bankruptcies, liens and legal judgments. These are typically reported by local, state and federal governments and can stay on your report for up to 10 years. Finally, your credit report lists the inquiries made to your file. These can be hard or soft, and usually occur when you apply for a new credit card or loan.
It’s a tool for lenders
Your credit report provides lenders with information about your past borrowing. It includes accounts, credit limits and payment history as well as certain public records such as liens, foreclosures, court judgments and bankruptcies. It also contains a list of parties that have requested your report in the past two years. These are called credit inquiries and may include applications for credit cards, loans or mortgages.
The data in your credit report is the raw material that forms your credit scores, a number that indicates your creditworthiness at a glance. This score is used by lenders to help them decide whether to extend you credit and at what terms. Having a good credit history, reflected by high credit scores, can make it easier for you to get approved for credit card and loan offers. However, a poor credit report, reflected by lower credit scores, can lead to rejection or higher interest rates. Lenders and other businesses that check your credit file are required to follow strict consumer reporting laws.
It’s a tool for consumers
Credit reporting agencies collect data from creditors, lenders and public records to compile a report. This report contains a number of important pieces of information, including the status of your accounts (current, delinquent or charged off), your payment history, and your borrowing habits. The information in your credit report is used to create your credit score. It is used by lenders to make decisions about whether or not to grant you credit, and also to determine the terms and rates of any credit you receive.
Credit reports are also used by banks, utility companies, landlords and insurance agencies. Government agencies, such as child support or alimony courts, may also use them to determine your eligibility for certain benefits.
It is a good idea to check your credit report regularly, particularly when applying for new credit. Errors on your report can cost you thousands of dollars, so it is worth checking to see if there are any errors that need to be corrected.
It’s a right
Credit bureaus collect, compile and archive information on consumers. That data is then sold to businesses that use it for making decisions about extending credit, offering insurance or renting property. It’s used by banks, lenders, utility companies and even employers – but they have to get your consent first.
The Fair Credit Reporting Act establishes rules that limit who can see your report and why. It requires those who request a report to inform you of the purpose and provide their name, address and telephone number. It also says if a company finds information in your report that is inaccurate, they must correct it.
The law allows you to check your report for free once a year from each of the three nationwide consumer reporting agencies – Equifax, Experian and TransUnion. And it requires them to investigate any disputed information that isn’t resolved to your satisfaction within 30 days. You can also dispute inaccuracies on your own by filing a dispute through the bureau.