A credit report is a document that outlines your financial status, specifically your credit history. It is very important to know what really gets reported on your credit report. Especially, if you are planning on making any financial moves in the future.
A credit report is a summary of how you have handled credit accounts. These include the types of accounts and your payment history. Also in the credit report is certain information from your lenders and creditors.
Potential creditors and lenders use credit reports as part of their decision-making process. They use this information to decide whether to extend credit to you and at what terms.
Others, such as potential employers or landlords, may also access your credit reports to help them decide whether to offer you a job or a lease.
Insurance companies often review your credit report before issuing insurance. Or, if you’re applying for services such as a phone, utilities, or a mobile phone contract.
Most people have more than one credit report. The three national reporting agencies, Experian, Trans Union, and Equifax, work independently so it is advisable to get reports from all three for an accurate picture.
Credit reporting companies, also known as credit bureaus or consumer reporting agencies. They collect and store financial data about you that is submitted to them by creditors. These include lenders, credit card companies, and other financial companies.
Creditors are not required to report to every credit reporting company.
When Does Your Credit Report Start?
You’ll first have to have a credit file with a credit bureau. Because you are not assigned a credit report at a certain age or given one at birth. Once your credit report is requested, the bureau will look through its database to find information related to you and compile it to create your credit report.
Because creditors may not report to all three bureaus equally, your credit report may look different depending on the bureau providing it. It also may differ depending on who requested it.
For instance, when you request a copy of your credit report, you’ll see a list of your recent hard and soft inquiries. But a lender may get a copy that only has hard inquiries.
Type Of Information Contained On Your Credit Report
Although each of the credit bureaus format and report your information differently, all credit reports contain basically the same categories of information.
The credit report contains personal identifying information
- Your name and any name you may have used in the past in connection with a credit account, including nicknames
- Current and former addresses
- Social Security number
- Phone numbers
credit and financial information
- Current and historical credit accounts, including the type of account (mortgage, installment, revolving, etc.)
- The credit limit or amount
- Account balance
- Account payment history
- The date the account was opened and closed
- The name of the creditor
and public information along with recent credit requests
- Civil suits and judgments
The credit report will provide personal information like your full name, frequently used nicknames and aliases, date of birth, and social security number.
It will also reveal your current and past addresses, present and past jobs and if applicable, information about your spouse as well.
What to look for when reviewing your personal information
- Did they spell your name correctly?
- Does the report show your current address?
- Check your Social Security Number carefully to ensure that the digits weren’t erroneously transposed.
If any of this information is incorrect, be sure to dispute it with the credit bureau(s) that have this information wrong on their report.
There might also be a section for “Personal Statements” in which you would find items like a security freeze, fraud alert, or power of attorney comments. Ensure any Personal Statements are correct.
Financial information of all your accounts with their opening date and credit limit are in it. These could be accounts with banks, credit card companies, power and telephone companies, and such.
It will also detail your loans like mortgages, student loans, and installment loans with relevant information, such as, payment pattern, default in payment, debts that are less than seven years old, and so on.
Some records will appear permanently.
These are salaries above $75,000, any credit transaction or application for a credit card or insurance beyond $150,000, and unpaid tax liens.
What to look for when viewing credit and financial accounts
Accounts in good standing mean that your payments have been on time and that you’ve met the terms of your agreement with the creditor.
Although the report states you’re in “good standing” still check to make sure that you know about this account (validate account name and number) and that the date opened, balance, payment status, and payment history all match your records.
Negative accounts display information about accounts for which payments have been missed. As with accounts in good standing, make certain that all information is correct from the account number and recent balance to the past due amount and payment history.
If anything doesn’t look right, be sure to contact the credit bureau(s) and/or creditors.
Information from public records particularly those with a financial angle will always appear.
This information usually comes from state and county courts. It will include convictions, arrests, charges, and monetary judgments.
They can appear only for seven years. However, under federal law, convictions will appear indefinitely. If you have declared bankruptcy, the same will appear on your credit report for not more than ten years.
Certain records do not appear. Debt records that are more than seven years old and bankruptcy records that are more than ten years old.
Your age, marital status, and race cannot appear if a current or prospective employer asks for it.
Medical records can appear only with your express permission.
Why Is Your Credit Report Important?
The data in your credit report is the raw material that creates credit scores, important numbers that can have a big financial impact on your life.
If your credit report shows a long history of on-time payments, it may mean you have higher credit scores, which will help you get credit cards and loans on more favorable terms.
Conversely, late payments, bankruptcy, and similar marks on your credit reports can lead to lower credit scores and make it harder for you to get approval for credit cards and loans, or cause a lender to charge a higher interest rate.
In addition, a credit report can reveal unauthorized credit activity associated with identity theft. Credit inquiries and new loan or credit accounts you’re unaware of can indicate fraudulent activity.
Reviewing your credit reports regularly can help you detect suspicious activity and resolve it more quickly.
Thus a credit report will help a person or organization make an informed judgment before entering into any transaction or deal with you.
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