What’s really in a credit report anyway?

If you have ever paid ANY attention to your finances, you have heard the term “credit report”.  Have you ever actually seen a credit report?  Have you seen YOUR credit report?  Do you know what information is contained in a credit report and where it comes from? What follows is an analysis of credit reports from each of the 3 main credit reporting agencies:  Equifax, TransUnion, and Experian.  What is a “credit report”?  According to the Federal Trade Commission, “a credit file disclosure, commonly called a credit report, provides you with all of the information in your credit file maintained by a consumer reporting company that could be provided by the consumer reporting company in a consumer report about you to a third party, such as a lender. A credit file disclosure also includes a record of everyone who has received a consumer report about you from the consumer reporting company within a certain period of time ("inquiries"). The credit file disclosure includes certain information that is not included in a consumer report about you to a third party, such as the inquiries of companies for pre-approved offers of credit or insurance and account reviews, and any medical account information which is suppressed for third party users of consumer reports. You are entitled to receive a disclosure copy of your credit file from a consumer reporting company under Federal law and the laws of various states.”  In other words, credit reporting companies (i.e. Equifax, TransUnion, and Experian) maintain records on ALL consumers that use credit.  Those records, your personal identification information, and information about who has viewed your credit records make up your credit report.  Any person that has applied for and received credit has a credit report.  A credit report and a credit score are NOT the same thing.  What is the role of the credit reporting agencies?  There are 3 national credit reporting agencies: Equifax, TransUnion, and Experian.  These companies gather information from public records, creditors, and other sources and compile a credit history.  This history is made available to existing and potential creditors as allowed by law.  Credit histories may be obtained by potential employers, landlords and anyone else with an interest in your use of credit.  A credit agency plays no part in granting or denying credit to anyone.  Their job is to provide INFORMATION that allows potential creditors to decide whether or not to grant credit.Credit reporting agencies are businesses and they make money from the information and services they provide.  All 3 credit reporting agencies provide a variety of services for individuals and businesses and they charge for those services.  Why do I have to pay to see my credit report?  You don’t.  The Fair Credit Reporting Act (FCRA) mandates that each of the 3 credit reporting agencies must provide, upon request, 1 free credit report to each consumer every 12 months.  To receive your free credit report, go to www.annualcreditreport.com .  Be aware that many websites exist using similar names and require you to pay for your report.  Make sure you go to the correct web site so that you will, indeed, get a free report.  What information is included in my credit report?  1.       PERSONAL INFORMATION: a.       Name (including previous names, maiden names, married names, etc.) b.      Birthdate c.       SSN d.      Address History e.       Employment History  2.       CREDIT SUMMARY a.       Types of credit accounts (mortgage, installment, revolving, etc.) b.      Number of accounts c.       Balance of Accounts d.      Number of OPEN accounts e.       Number of CLOSED accounts f.        Number of accounts in GOOD STANDING g.      Number of accounts CURRENTLY PAST DUE h.       Negative Accounts History i.         Number of account inquiries in the last 12 months  3.       ACCOUNT INFORMATION (specific information for EACH account in your name) a.       Account Name b.      Account Type c.       Account Number d.      Date Opened e.      Current Balance f.        Last Date Reported g.      Amount Past Due h.       Account Status i.         Credit Limit  4.       ACCOUNT INQUIRIES – This lists the names and contact information for companies that requested your credit report during the 12 month period prior to the report.  5.       COLLECTIONS – This lists any accounts that have been turned over to a collection agency because of non-payment.  6.       PUBLIC RECORDS – This lists any public record information (bankruptcies, liens, etc.) that appear in federal, state, or county court records. 7.       INFORMATION ABOUT HOW TO REPORT DISCREPANCIES 8.       INFORMATION ABOUT CONSUMER RIGHTS (as stated in the Fair Credit Reporting Act)  Certainly, your credit report is important!  It is your financial resume and you should treat it as such.  Get a copy of yours today.  Pay attention to what it contains; make informed decisions about how much credit you have and how you use it; review your credit report periodically to make sure that it is current.  If you have questions about the information it contains, address those questions to your creditors and to the reporting agencies.  Click here to view a sample credit report.