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Guide to Credit Reports: 11 Things Simply Explained

February 14th, 2017 · No Comments · Credit Reports

by Kristy Welsh

(Last Updated On: December 11, 2017)

Guide to Credit Reports: 11 Things Simply ExplainedWhether your credit is good or bad all depends on what’s on your credit reports. So of all the ways to fix your credit — or go from already good credit to excellent — understanding credit reports ranks pretty high on the list. Maybe that sounds boring to you. Or intimidating. But the truth is, it’s neither. Actually, it’s pretty interesting how credit reports work and a lot easier to understand than you might think.

1) What credit report actually means

A credit report is a record of your credit history that begins when you open your first credit account. The volume and nature of information on a credit report depends on a couple of things – how much credit you’ve applied for and received, and how well you have paid your debts.

2) What’s on a credit report

The type of information that could be on a credit report includes:

  • Personally-identifying information
    • Date of birth
    • Social security number
    • Name(s) – This may be plural depending on variations on your name that you have used when applying for credit. For instance, Jane Doe, Jane M. Doe, Jane Mary Doe.
    • Addresses – Current and previous. This may not be an exhaustive list, as this only represents addresses reported to the bureaus.
    • Employers – As with addresses, this may not be an exhaustive list, as this only represents employers reported to the bureaus.
  • List of your credit accounts, including account details:
    • Account type
    • Date opened
    • Credit limit or loan amount
    • Balance
    • Monthly payment
    • Date of last payment
    • Date of last activity
    • Date closed
  • Credit inquiries
  • Collection accounts
  • Public records, (e.g., judgments, foreclosures, liens)
  • Personal statements (You will only have these if you have submitted a statement to the credit bureau. Learn the pros and cons of submitting a 100-word statement.)

What a credit report does not include is your credit score, which is a separate credit rating tool. That said, the two are not unrelated. An algorithm is used to turn the information on your credit report into a three-digit credit score.

Besides the exclusion of your credit score, a credit report also does not include:

  • Income or net worth
  • Unemployment
  • Your spouse’s credit history
  • Criminal records
  • Medical records
  • Race
  • Religion
  • Political party affiliation

Note, although medical records will not show up in your credit reports, unpaid medical debt could show up in collections.

3) Where they come from

Credit reports are generated by the credit bureaus.

There are many consumer reporting agencies, but it’s the big three national credit bureaus that matter most – TransUnion, Experian, and Equifax.

Each of the three national credit bureaus has its own credit report on file for you. These reports are compiled using information provided to them by data furnishers.

Data furnishers include credit card issuers, mortgage lenders, auto lenders, and other creditors through which you’ve taken out loans. If you’ve fallen behind on some bills, you may also see listings from cell phone companies, utility companies, doctors, and hospitals (i.e., data furnishers who only report when they have something negative to put on your record).

Find out how credit bureaus work (including how to make them work for you).

4) Why they matter

When you apply for credit, it’s your credit reports that have the most influence over whether you get it or not, and under what terms. Yes, your credit score matters. But remember, that’s just a numeric interpretation of what your credit report says. What matters most is the source – your credit report.

And keep in mind, it’s not just potential creditors that look at your credit reports and scores. They’re also used by landlords, insurance companies, rental car companies, and even employers in some cases.

That means what’s on your credit reports can influence:

  • Loan approvals
  • Interest rates
  • Credit limits
  • Deposit requirements
  • Auto insurance premiums
  • Whether you get a job (if a credit check is required)
  • Whether you’re approved for a house or apartment rental

So it’s not just your ability to get credit that’s affected by your credit reports. It’s how much you pay for it, too. Take financing a car, for example. Your credit not only affects whether you get the loan, but the deposit you’re required to make, the interest rate you get, and what you pay in auto insurance premiums.

What's On Credit Reports and What's Not5) How credit reports are organized

Though all three bureaus include essentially the same type of information, the way they organize their credit reports varies slightly. Here’s a breakdown of what to expect from each of the big three.

TransUnion credit report format

  • Date report was created
  • File number
  • Personal information
    • Social security number (all but the last four digits masked for your protection)
    • Names reported
    • Addresses reported (and dates these addresses were reported)
    • Telephone numbers reported
    • Employment data reported (and dates this employment was verified)
  • Public records
  • Account information
  • Adverse accounts
  • Promotional inquiries
  • Account review inquiries
  • Summary of your rights under the Fair Credit Reporting Act

Experian credit report format

  • Name
  • Report number
  • Date report was created
  • Personal information
    • Names associated with your credit (along with name identification numbers that correspond to the account that name is associated with)
    • Addresses associated with your credit (along with address identification numbers that correspond to the account that name is associated with, residence type, and geographical code)
    • Year of birth
    • Spouse or co-applicant (if applicable)
    • Phone numbers
    • Current or former employers
  • Your personal statements (if applicable)
  • Potentially negative items
  • Accounts in good standing
  • Credit inquiries
    • Inquires shared with others
    • Inquiries shared only with you
  • Contact and dispute file information
  • Summary of your rights under the Fair Credit Reporting Act

Equifax credit report format

  • Name
  • Date report created
  • Report confirmation number
  • Report summary
    • Report date
    • Credit file status (indicates if fraud alert is on file)
    • Alert contacts
    • Average account age
    • Oldest account
    • Credit accounts
    • Other items
  • Revolving accounts (e.g., credit cards)
  • Mortgage accounts
  • Installment accounts
  • Other accounts (that do not fall into the categories above)
  • Consumer statements (if applicable)
  • Personal information
    • Name
    • Social security number
    • Date of birth
    • Alert contact information
    • Contact information (i.e., your current and previous addresses, including dates reported)
    • Employment history, including company name, occupation, start date, status, and location
  • Inquiries
  • Public records
    • Bankruptcies
    • Judgments
    • Liens
  • Collections
  • Dispute file information
  • Summary of your rights under the Fair Credit Reporting Act

Get tips on interpreting your credit reports.

6) Who can see them

Your credit reports are not public records that anyone can access. On the contrary, they are protected by law and only made accessible to people with permissible purpose.

Expect a check of your credit report when you submit applications to:

  • Credit card companies
  • Landlords
  • Insurance companies
  • Utility companies
  • Government agencies
  • Potential employers (in some cases)

And anyone else to whom you give written consent can also access your credit reports. This includes the permission you give to services that monitor your credit (e.g., Credit Karma, Credit Sesame, WalletHub). Court orders and subpoenas can also give people access to your credit reports.

Last but not least, you can look at your credit reports, which you should do at least once a year.

7) How to get them

AnnualCreditReport.com

Every 12 months, you are entitled to see your credit reports for free – from TransUnion, Experian, and Equifax – through AnnualCreditReport.com.

When you visit this website, you’ll be asked to provide personally-identifying information, including your name, social security number, current address, and previous address if you have lived at your current address less than 2 years.

To further verify that it is, indeed, you requesting your credit reports, you’ll be asked additional information to verify your identity. For instance, you may be shown a list of employers or addresses and asked to choose the one you are (or have been) associated with.

Once your identity is verified, you will be shown the first of three credit reports. To see this report, you will be forwarded to the associated credit bureau website. After you have finished reviewing the first report, you will be asked to return to AnnualCreditReport.com so you can move on to the second report. Before you do, save or print that first report first.

After returning to AnnualCreditReport.com, you will be asked to view your second credit report. Again, you will be forwarded to the associated credit bureau website. You’ll follow the same process until you have viewed all three credit reports.

Again, be sure to save or print your reports before logging out of the credit bureau sites.

When you’re turned down for credit

If you apply for credit and don’t get it, you deserve an explanation. That’s why this situation entitles you to see (for free) the credit report that the decision was based on. In the same notification that turns you down for the credit, you should receive instructions on how to request your free credit report (and from which credit bureau).

Correcting a disputed listing

When you dispute something on a credit report – and the credit bureau tells you they are going to correct the information – you deserve proof that it gets done. That’s why this situation also entitles you to a see (for free) the credit report, so you can be sure it reflects the correction.

Free credit monitoring sites

You can monitor the information on your credit reports all year long through free credit monitoring sites like Credit Karma, Credit.com, Credit Sesame, WalletHub, and Quizzle. These sites also give you access to the VantageScores generated by your credit reports.

UPDATE: In the wake of the Equifax hack, it’s recommended that you keep a credit freeze on all of your credit reports. Unfortunately, many free credit monitoring sites won’t work while a credit freeze is in place. Credit Karma is a notable exception; it just has to be unfrozen during the sign-up process.

Credit bureaus

You can pay for access to your credit reports directly through TransUnion, Experian, and Equifax. Beware of free trial offers, as you will have to remember to cancel the service or be charged a monthly fee.

Other

You may also see your credit reports for free:

  • If you have reason to believe a credit report is inaccurate due to fraud
  • If you receive an adverse action notice from a creditor
  • If you receive a risk-based pricing notice from a creditor
  • If you are unemployed and looking for work
  • If you are on public welfare assistance

8) Which ones you need to see

You need to see all three national credit reports – from TransUnion, Experian, and Equifax. That’s because you can never assume that all of them are the same.

Creditors are not required to report the same information to all three bureaus. So, what’s on your TransUnion report for instance, may not be on your Experian or Equifax report. At the same time, you never know which bureau a creditor is going to use when considering you for credit in the future.

9) Using your credit reports for credit repair

If you have bad credit, you need not pay an expensive credit repair company to help you fix it. Instead, you can go straight to the source – your credit report – and start cleaning up your credit yourself.

Dispute errors

Though there is nothing a credit repair company can do for you that you cannot do for yourself, many people choose to use them anyway. If you are considering the same, beware these credit repair company red flags. And be sure to consider DIY credit repair first.

Request debt validation

  • Look for collections on your credit reports.
  • If it’s been less than 30 days since you received the initial communication from the collector, request debt validation. If they cannot provide this, the listing must be removed.
  • If they respond to your request with debt validation, but you believe something about the collection account is incorrect, dispute the listing.
  • If they respond to your request with debt validation, and you know the collection account is accurate, check the statute of limitations. Though the details of the debt may be correct, you may no longer be required by law to pay it. That said, it can stay on your credit report for up to 7 years, so if that’s still a long way off, you may want to pay it anyway.

Negotiate debt settlement

Before you pay a dime to a debt collector, try to settle for less than you owe. The older the debt, the better your chances for striking a deal. This is especially true if the debt has passed the statute of limitations. This buys you plenty of time to negotiate for less. Best of all, you need not pay a debt settlement company to do it for you. Learn how to DIY.

When Negative Listings Fall Off Credit Reports10) When negative listings fall off credit reports

The number of years it takes for negative listings to fall off your credit reports varies:

  • 2 years for credit inquiries (though hard inquiries only affect your credit score up to 12 months and soft inquiries not at all)
  • 7 years for:
    • Late payments
    • Charge-offs
    • Collection accounts (plus 180 days)
    • Foreclosures
    • Judgments (with exceptions)
    • Paid tax liens (if unpaid they can stay on indefinitely)
  • 10 years for bankruptcies

Of course, these timelines are only relevant to accurate listings. If you can use the dispute process to prove any of these are in error, negative listings may be removed immediately.

11) Using them to detect identity theft

If you see a credit account on your credit reports that you do not recognize, it could be a sign of identity theft. So the more often you check your credit reports the better, as the sooner you detect a problem, the more easily you can minimize the damage.

Should you suspect identity theft, follow these steps, which includes immediately notifying the credit bureaus; they can place a fraud alert on your credit reports.

And there you have it – the nuts and bolts of credit reports to help you go from bad credit to good, good credit to excellent, or to maintain the great credit you already have.

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