If you have ever applied for a credit card or loan, chances are that someone looked at your credit report. But what is in a credit report? And what can it tell us about ourselves? Your entire life story might not be on there. However, this information is one way for creditors to see how you manage your money. If you’re going to get approved for a loan or credit card, it’s important to pay attention to what’s going on in your credit report.
What Is a Credit Report?
A credit report is a list of information that summarizes what credit accounts you’ve opened in the past and how you’ve managed them. And it’s the credit reporting bureaus who are responsible for compiling this information.
There are currently three major credit reporting bureaus in the US:
- Equifax
- Experian
- TransUnion
Credit reports may be used by lenders, credit card companies, potential employers, landlords, utility companies, phone service providers, and other companies. The information in your report helps them decide whether or not to approve you for a loan, credit card, line of credit, financial product, or service based on how well you’ve handled previous credit accounts.
💡 Note: Your credit history also helps financial institutions determine what the rates and terms of your loans will be.
What Is Included in Your Credit Report?
Your credit report includes information broken down into several categories, including personal information, credit account history, public records and collections, and inquiries.
Personal information
This is information about you, the consumer. It includes your name, address, Social Security number, date of birth, other names used to refer to you (a maiden name, for example), and employment information.
Credit account history
In the credit account section of your report, you’ll find all open credit accounts that you’ve had in the past seven years, as well as any closed accounts within those same time periods. Each account should include such information as the creditor’s name, your current balance or loan amount, payment history, credit limits, interest rates, and the date that you opened or closed the account.
Public records and collections
Public records can include anything from bankruptcy filings to court judgments against you for missed child support payments. This information is public knowledge and can impact your credit score in a negative way if it’s very recent or indicates that you have bad money management skills. In this section, you can also find any outstanding debts that have been sent to collections.
Inquiries
When you apply for a loan, credit card, or other product or service, the company can request a copy of your credit report to get a sense of how you’ve handled credit in the past. This request can either be a soft inquiry or a hard inquiry, depending on the company that is requesting. You can also inquire for a copy of your own credit report periodically to confirm that your information is correct and up-to-date.
If an individual inquires about your credit report, they must contact one of the three major credit bureaus; the request then shows up on your credit report as an inquiry. A hard inquiry is the only form of inquiry that will harm your credit score. While soft inquiries still appear on your report, they will not do any damage. Too many inquiries within a short time period may also hurt your score.
How to Get a Free Credit Report?
Under the Fair Credit Reporting Act, consumers in the U.S. have legal access to one free credit report per week from each of the three major bureaus. You can request your reports at AnnualCreditReport.com.
When you’re ordering your free copy, you should review your credit reports all at once to compare the information. This will allow you to find any discrepancies between agencies and ensure your credit score is accurate.
Why Is it Important to Check Your Credit Report?
Checking your credit report gives you the opportunity to make sure that your information is correct and up-to-date. If there are mistakes, they can lead to incorrect information being reported about you. Incorrect information could affect new loans or lines of credit, identity theft and fraud, and serious credit score damage.
If you request a copy of your credit report, you can also get a sense of what companies and individuals are inquiring about your credit history.
Lastly, if you feel like you are struggling with credit, it’s important to get a baseline of where you currently stand. Your credit report will give you a summary of your credit account history so that you can assess what areas you are doing well in as well as what areas can be improved. After you’ve determined what areas you need to improve, you can begin working toward a healthier financial life.
How Long Does it Take for Information to Show Up on Your Credit Report?
Information in your credit report is usually updated every 30 to 45 days. With that said, if you make a payment on one of your accounts or close an account altogether, information about it may not be available for up to 60 days after the activity has occurred.
If you’ve just opened your first credit account and are essentially starting from scratch, it’s advised that you give the credit bureaus approximately six months to formulate an accurate depiction of your credit history.
How to Fix Errors on Your Credit Report
If you find errors on your credit reports, it’s important that you contact the appropriate credit bureau right away. Unfortunately, some errors may not be fixable, but there are a few steps you can take to maximize the chances that you will get it fixed.
To dispute errors online, you can do so on the following pages:
You can also dispute credit report errors by calling the credit bureaus:
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- Experian: (866) 200-6020
- TransUnion: (800) 916-8800
- Equifax: (866) 349-5191
Or you can send a letter to these mailing addresses:
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- Experian
P.O. Box 4500
Allen, TX 75013
- Experian
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- TransUnion Consumer Solutions
P.O. Box 2000
Chester, PA 19016-2000
- TransUnion Consumer Solutions
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- Equifax Information Services LLC
P.O. Box 740241
Atlanta, GA 30374
- Equifax Information Services LLC
You will need to provide them with proof of the information in question. For instance, if your credit report shows that you have several delinquent payments on a credit card, you will need proof that you made these payments on time.
If you don’t have proof, then it’s best to contact the creditor who reported this information and ask them for assistance with your claim.
For continued issues getting a credit bureau or creditor to help fix an error on your report, consider filing a complaint with the Consumer Financial Protection Bureau.
