Knowing your credit report and its content is very important. There is a remarkable amount of dependence on credit in our society and credit reports now impact employment, housing, credit and more. To learn how you have handled credit in the past, most all creditors will obtain a report from a local credit reporting agency or credit bureau. Good credit is an integral part of an individual’s financial growth.
A consumer credit report is a document that primarily contains a factual record of an individuals credit payment history. Your credit report lists any credit card accounts or loans you may have, the balances, and how regularly you make your payments. It also shows if any action has been taken against you because of unpaid bills. Your current credit obligations, your payment history and your debts are all recorded in your credit report. It also provides information on where you live and work and may note other matters of public record such as judgments or bankruptcies. Your credit report doesn’t only contain financial information; it also contains a lot of personal information, including past addresses, jobs and any other names that you may have used.
Your credit bureau report is based on information supplied over time by your creditors to a company that gathers and stores the data. Almost every time you obtain credit from a bank, a department store, or other lender, the information is placed in your credit report. A company that gathers and sells the credit information is called a consumer reporting agency. The most common type of consumer reporting agency is the credit bureau. A credit bureau or credit reporting agency is in the business of gathering, maintaining, and selling information about consumers’ credit histories. It collects information about consumers’ payment habits from credit grantor’s like banks, savings and loans, credit unions, finance companies, and retailers on a voluntary basis.
These types of companies collect information about your credit activities, store it in giant databases, and charge a fee for supplying the information. There are three major credit bureaus that operate nationwide, plus many smaller companies serving local markets. The three major credit bureaus providing nationwide coverage of consumer credit information are: Experian, Equifax and TransUnion.
A consumer credit report contains a lot of data but it is generally grouped into four types of information: identifying information, credit information, public record information, and inquiries. Although each credit reporting agency may report information differently, all credit reports contain the following:
Personal, Identifying Data – This part of your file contains identifying information including you name and any aliases, your social security number, your current and previous addresses, your date of birth, current and past employers and your telephone number.
Credit Accounts and Credit History – Your report lists information on each of your accounts, including the account type, date it was opened, total credit limit, current balance, outstanding or past due balances and payment history. Your payments to various lenders or creditors may include credit card companies, mortgage lenders, banks, finance companies, stores and many other types of lenders.
Credit Report Inquiries – Anytime someone looks at your credit file, an inquiry notice is placed on your file. When a lender requests your credit report, either to process an application you submitted or to qualify you for pre-approved offers, the credit report inquiry is recorded. An inquiry may only record the name and date of the company that checked your record. When an individual request their own report, however, the inquiry is not listed.
Public Records and Collections – This includes information on bankruptcies, foreclosures, and any other liens. For individuals that have any tax liens, public bankruptcies, judgments or collection agency debts, these will be included on their credit history report.
There are a variety of restrictions on what can not be on your credit report and what will not generally be in a credit report. A credit report does not include information about your checking or savings accounts or any brokerage or investment accounts, bankruptcies that are more than 10 years old, charged-off or debts placed for collection that are more than seven years old, gender, ethnicity, religion, educational history, your salary, political affiliation, medical records and history, or criminal records.
Although the credit reporting agencies’ data is fairly extensive, they are incomplete in at least two respects. First, not all information on credit accounts held by individuals is reported to the credit reporting agencies. Data reporting to credit bureaus is a voluntary system. Some small retailers and mortgage and finance companies do not report to the agencies, and individuals, employers, insurance companies, and foreign entities typically do not report loans they extend. Also, information on student loans is not always reported. Second, some accounts that are reported contain incomplete or out-of-date information. Sometimes creditors do not report or update information on the credit accounts of consumers who consistently make their required payments as scheduled or on the accounts of those who have been seriously delinquent in their payments, particularly accounts with no change in status. Similarly, credit limits established on revolving accounts, such as credit cards, are not always reported or updated.
Although credit reporting agencies provide individual credit reports to lenders and others that have authorized access to the report when you apply for credit, they do not make actual lending decisions. It is up to individual lenders to evaluate your credit report and any other factors they consider important and then decide whether or not to offer you credit.