What is a Credit Report?
A credit report is a detailed report of your credit history. Credit bureaus collect your financial information from the same lenders that grant you credit, and they create credit reports based on that information. Then lenders, landlords, employers and others use those reports to determine your creditworthiness – or in other words, if they are going to work with you – whether it be hiring you, letting you rent from them, or lending you money.
Credit reports include some of your personal information such as your current and previous addresses, your social security number and your employment history. They also include your credit card payment history, the amount and the types of accounts that are past due or are in good standing.
Credit reports include a detailed account of your current credit balances, credit limits and the dates that you opened your credit accounts. Credit reports also list credit inquiries (each time you, or someone such as a bank, inquires about your credit), and the details of your accounts that are turned over to them like liens and wage garnishments. Generally, credit reports retain your negative information for seven years. Bankruptcies typically stay on your credit report for about 10 years.
What kind of information appears on your credit report?
Collection Accounts: If an account is referred to collections it’s because of a delinquent payment or a bad check. This appears on your credit report as a collection account. Collections can appear as paid or unpaid, and all collections whether they are paid or not are considered to be negative by all credit grantors.
Inquiries: Every time you or a grantor pulls your credit file from a bureau, a credit inquiry will appear on your credit report. If you have few inquiries over the last couple years, there may be no negative effect on your credit. However, if you have multiple inquiries it can have a negative effect and your credit grantors may be more cautious and might deny you credit.
Merchant Trade Lines: These include all regular credit lines such as credit cards, mortgages, auto loans and department store cards. If you have any history of a late payment or if the line was included in a bankruptcy, charge off, or put into repossession, that listing will be marked as negative by the credit grantors.
Public Records: Public records are items such as bankruptcies, judgments and liens. All court records, including satisfactions, are considered negative by credit grantors.
Who has access to your credit reports?
If you submit an application for credit, an insurance policy or a rental property, creditors, landlords, insurers and others are legally allowed to access your credit report. Your employer may also ask for a copy of your credit report as long as they have your permission to access it. Each of these entities typically pay the credit bureaus to access the report, which is how the bureaus make money.
Can you get a free credit report?
Under the Fair Credit Reporting Act each bureau is required to give you a free credit report once a year. There are also other circumstances in which you can get a free credit report. Such as if you are on welfare, if you are unemployed and plan to look for a job within 60 days, or if you are a victim of identity theft. If you are looking for a free credit report, be cautious and make sure you go to trusted sites. We suggest going to annualcreditreport.com for your free annual credit report.