What is in a Credit Report
If you are applying for a loan, mortgage, services, even a job – you will need to turn in or provide access to your credit report. A credit report is a document that details your credit history. But what is in a credit report?
It includes your account types, payment history, and other information from credit bureaus. Individuals and companies refer to this whenever loans, utilities, and employment are sought.
More than shedding light on the report, this article will also explore its importance. Also discussed are the steps on getting this report – and how you can file a dispute for inaccurate information.
What is a Credit Report, and Why is it Important?
A credit report is a summary of credit information. Three credit bureaus gather such data: Equifax, Experian, and Transunion. They obtain this data from credit card companies, financial institutions, lenders, etc.
It is important to note that not all reports from these bureaus are the same. They have varying methodologies. That said, details in one account may not be included in the other.
Due to its content, your credit report serves as a measure of your creditworthiness. The last thing you want is a negative credit report, especially when you have control over the accuracy of the information lenders’ will see.
What’s in a Credit Report?
Every credit report contains the following data:
Your report will include your name, birthdate, and past/current addresses. It also lists your contact number and social security number.
Variations of your details are included here as well. For example, if a company misspelled your name, it will be reported in this section.
Knowing what is in a credit report will give you better insight into how your credit risk is viewed. It also makes it easier to dispute an issue with your credit if the need arises.
This part of the report is an exhaustive summary of the following:
- Current and former accounts, including their types (i.e., mortgage or installment)
- Credit limit or account
- Account balance
- Payment history
- Date the account was opened and closed
- Creditor’s name
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, your credit score will be negatively impacted.
This includes past-due accounts that have been forwarded to a collection agency. It consists of your overdue accounts with hospitals, banks, retail stores, etc.
This includes bankruptcies, including the filing date and chapter. This part also covers foreclosures, liens, civil suits/judgments, and overdue child support collected from county and state courts.
Obviously, each of these items can negatively impact your overall credit score. Therefore, it is very important to get this information removed if it is incorrect.
Inquiries From Companies Who Accessed Your Credit Report
There are two types of inquiries you will find in your credit record. One is ‘soft’ or voluntary inquiries, which results from checking your account. It also includes account reviews and pre-approved credit/insurance offers. These will not affect the way your credit score is computed.
On the other hand, hard or involuntary inquiries are those made by a lender or a credit card company. It happens when you apply for a loan or a new credit card. 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.
This information stays in your report for about two years. Compared to the former, hard inquiries will lower your credit score for some time.
Just remember 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/soft inquiries from you completing a loan request as well as involuntary/hard inquiries.
What is a Credit Report Good For?
A credit report helps determine a lot of things in your life.
For lenders, your report will help them decide on what interest to give for your loan or mortgage.
On the other hand, service companies use it to see if they will give you a utility account.
Landlords also use credit reports to decide what deposit amount to ask from you.
Employers may also use your credit report to see if you are fit to hire. However, they can only access your data if you have given them permission in writing.
Is a Credit Report the Same as Your Credit Score?
It seems like it, but they are two different things.
As mentioned, a credit report is a summary of your financial activity. Remember what is is in a credit report? It includes your information, credit accounts, credit inquiries, and public records.
Credit score, on the other hand, is the rating entities give to your credit report. You can liken it to the way your teacher scores your term paper.
How Long is Credit Information Kept on File?
This will depend on the data.
Active accounts that are paid as agreed will stay as long as they are open and reported. Closed charges that are paid as agreed will remain for ten years from the first report.
As for negative data, they will reflect on your report for seven to ten years.
Late Payments: 7 years
Late payments will stay on your report for seven years from the date you have missed it. It will remain even if you have paid the due balance.
For example, if you missed a payment in January 2015, it will be on your report until January 2022.
Charged-off or Collection Accounts: 7 years
If you have not paid your due accounts, the company will pass this off to a collection company.
Like late payments, this will stay for seven years from the date of the charged-off status.
Even if you pay this account, the data will remain in the report for the said period. However, its impact on your credit score will not be as bad as unpaid charge-offs.
Bankruptcy: 7-10 years
Depending on the type of bankruptcy, it will reflect on your report from seven to ten years.
Other Negative Accounts: 7 years
Accounts such as repossessions will stay on your report for seven years. This is timed from the first missed payment that led to the status.
Other negative accounts that are in your report include foreclosures and short sales.
Hard Inquiries: 2 years
As mentioned, hard inquiries happen when a company asks for your credit report. Like the above-mentioned negative activities, this could affect your credit score.
Why Should You Check Your Credit Report?
Most people usually get a credit report when they apply for a job or buy something expensive. However, it is best to check it at least once a year to:
Ensure the Completeness and Accuracy of the Information
Credit bureaus are not perfect; they are prone to errors too. If you do not check your credit report, you will not be able to spot such mistakes. In the end, these errors could cost you a new job or lower interest rates.
That said, you need to evaluate your report for any of the following:
- Personal information. Is your name spelled correctly? Is your address updated?
- Account information. Are all your listed accounts complete and accurate?
- Other inaccuracies or mistakes.
You also need to make sure that ‘negative’ data has been deleted. If you have already settled your late payments, they should be removed after seven years.
Know What Lenders See on Your Report
Ever wonder why companies keep on turning down your request for loans or services? There must be something on your credit report, which is why you need to check it.
Some errors may affect your standing, so you should have them removed right away. Which leads us to the next section…dealing with theft or fraud!
Check for Identity Theft or Fraud
Some mistakes on your credit record could be signs of identity theft.
Thieves can get hold of sensitive information, such as your name, birth date, and address. They can even access your social security number and bank accounts.
Once they get these, they can open new credit card accounts. They can also use the data to apply for utility services or use your medical insurance. They can even steal your tax refund!
Worse, these apprehended thieves will still pretend to be you when they get arrested.
If left unmanaged, identity theft can damage your credit score and standing.
What is the Best Site to Get All Three Credit Reports?
You can download all your credit reports from the Annual Credit Report website. This is in line with the mandate of the Fair Credit Reporting Act.
Funded by the three credit bureaus, this website gives you free instant access to your reports once a year.
Apart from this yearly access, you may also get one for free if you meet the following circumstances:
- You are on welfare
- You are unemployed and plan to look for a job within the next 60 days
- You are a victim of identity theft or another type of fraud
- You have a fraud alert in your credit records
- A company has taken adverse action against you. It means you have been denied credit, insurance, or employment. To get a free report due to such an event, you need to report it within 60 days.
Should you wish to get more companies within the 12-month window, you will have to pay a small amount. In this pandemic, however, you can get a free report every week (check for continued availability).
You may also get six additional free reports through the Equifax website. This is on top of the free one you can get from the Annual Credit Report website.
If you do not have access to any of the mentioned sites, you can also request a credit report by:
- Calling 1-877-322-8228
- Mailing a request form to the Annual Credit Report Request Service, PO Box 105281, Atlanta, Georgia 30348-5281
You will receive your report within 15 days after you have made a phone or mail-in request.
Apart from a text document, you may also get your credit report in large print, Braille, or audio format. Compared to online requests, you will not get this right away. You will need to wait for three weeks to receive such documents.
What Personal Information Will You Need to Provide When Requesting Your Credit Report?
When you apply for a credit report, you will need to give information that will verify your identity. You will have to provide your name, address, birth date, and social security number.
If you have moved in the last two years, you will need to provide your former addresses as well.
On top of these particulars, the credit bureau may also ask for things that only you know. For example, it may inquire about your mortgage payment amount.
You will need to answer these questions every time you ask for a report from different bureaus. Depending on the company, it may ask for information that is not indicated above.
How Do I Get Something Removed from My Credit Report?
Say you are reviewing your report, and you see something erroneous. You can file a dispute if you see something wrong with any of the following:
- Personal info, such as your name, address, birth date, or social security number.
- Inaccurate account information. For example, late payments for accounts you have paid on time.
- Mixed credit files are often the case with clients who have Jr. or Sr. in their names.
- Duplicate information, such as a debt encoded twice.
- Info that points to identity theft or fraud. For example, credit or collection accounts with which you are not aware.
Here are the steps you need to take to have any of the incorrect data removed.
Check the Reports from ALL Bureaus
If you are reviewing, say, an Experian report, you need to get a copy of your Equifax and Transunion reports as well. This will help you see if the wrong information is documented in all three bureaus.
Remember: some creditors only report to one or two bureaus. In some cases, they do not report to any agency at all.
Contact the Lender First
Whether you see the wrong info on one or all reports, it is best to contact the lender first. You may be able to settle the issue at this stage.
Once resolved, the lender will report this information to the bureaus. You may see this positive update a few weeks after.
File a Dispute for Free
If the issue can not be resolved at the lender’s level, then you may proceed with filing a dispute.
Should you see the problem across all three reports, you need to file with each company. If you have the data removed from your Experian document, it will not apply to your Transunion or Equifax reports. Additionally, these bureaus have varying dispute procedures.
When you file for a dispute, you need to provide documents that say otherwise. You should provide receipts or other proof of timely payment to dispute a late payment.
After filing a dispute, you should get reports within 30 days. Data proven false will be removed by the bureau within another 30 days.
If the bureau refuses to remove the data it believes to be accurate, you can file for another dispute. You may also give a brief statement that summarizes your concern.
Otherwise, you will need to get in touch with the creditor to settle this issue once and for all.
Final Credit Report Thoughts
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.
A credit report is a summary of your credit history and information. It includes your personal data, credit accounts, collection accounts. It also lists your public records and company inquiries. It is what lenders, utility companies, and employees use when you apply for something. Your report will help dictate your loan rates, deposit amounts, even your employment.
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. It is recommended that you check your credit report yearly to point out mistakes or signs of identity theft.
If you found this article on what is in a credit report helpful, please share the article so more consumers can also benefit from the information.