What is in a Credit Report
Most homebuyers are well aware of the fact that their credit report plays a large role in determining whether or not they qualify for a mortgage loan. Yet, most consumers have no idea what is in a credit report. By gaining a better understanding of what is in a credit report, you are better prepared to take the steps necessary to improve your credit rating.
While each of the three credit reporting agencies format their reports differently, you will find the same basic information contained in all of these reports. Here is an overview of what is in a credit report and how the credit reporting agencies obtain the information.
All of your credit reports contain personal identification information. This information includes:
- Social Security Number
- Date of Birth
- Employment History
This information, which is obtained from lenders each time you apply for a loan or line of credit, does not affect your credit score.
Credit Account Information
Professionally referred to the “trade lines,” this portion of your credit report includes information that lenders have provided regarding accounts that you have set up with them. This includes bank cards, mortgage loans, and auto loans.
Information shown in this part of the credit report includes the day you opened the account, the amount of the loan, your credit limit, your current balance and your payment history. Having accounts that are in good standing will have a positive impact on your credit score.
If your report shows that you have made late payments or if you have several credit cards that are all maxed out, on the other hand, your credit score will be negatively impacted.
The credit inquiries portion of your credit report includes a list of everyone who has accessed your report over the past two years. This includes voluntary inquiries from you completing a loan request as well as involuntary inquiries.
Involuntary inquiries typically occur when a lender looks at your report in order to determine whether or not they want to give you a pre-approved loan offer. Having an excessive number of credit inquiries will have a negative impact on your score. This is because a large number of inquiries makes it appear as if you are desperately trying to get as much money loaned to you as you can. If most of your inquiries are due to involuntary inquiries, you may need to write a letter to your mortgage lender explaining why you have such a large number of inquiries.
San Diego residential Realtor Marti Gellens said she has even seen this occur with clients who have taken comparison loan shopping to the extreme.
Public Record Information
Your credit report also includes public record information that the credit reporting agencies collect from county and state courts. This includes information such as wage attachments, foreclosures, suits, bankruptcies, liens and judgments.
Obviously, each of these items will reflect negatively on your overall credit score. Therefore, it is very important to get this information removed if it is incorrect.
Additional research provided by Carolina One Blog.