What should I know about credit reports?

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If you haven’t checked your credit report recently, you don’t want to end the year before seeing it. By proactively checking not only your score, but your whole credit report, you can get ahead of the game in the new year with all of your finances. Here are the important things to know.

What is a credit report? 

A credit report is a statement prepared by a credit agency that includes detailed information about your history of credit activity, current credit situation, and the status of each of your accounts.

How many credit agencies are there? 

There are three major credit agencies in the U.S:  Equifax, Experian, and TransUnion.

What type of information is on a credit report? 

Credit reports include personal information:

  • current/prior names
  • addresses
  • employers
  • social security number and date of birth
  • credit account history
  • accounts in collections
  • public record items, such as bankruptcies, foreclosures, judgments
  • companies who have accessed your report.

Credit reports will retain negative information such as:

  • late payments
  • debt collections
  • charge offs
  • repossessions

This information will remain for seven years, while bankruptcies typically remain for 10 years. Positive information can remain indefinitely.

How does my credit score relate to my credit report?

Your credit score is a single number calculated by the credit agency to summarize all of the information in your credit report. Like the reports themselves, they may be slightly different at each agency.

What is it used for? 

Your credit report is used to gauge how likely you are to pay a company what you owe them. Specifically it is used by banks and lenders to make decisions about whether to extend credit to you and what interest rates they will offer you. It is used by companies to determine if they should rent to you, offer you insurance, or provide services such as cable, phone, utilities and internet. And depending on the job, some employers will review your credit report as part of the hiring process.

Who sends information to the credit agencies? 

Lenders and creditors electronically report information about your credit cards, loans and credit inquiries to the credit agencies about every 30 days. Not all creditors will report your account information as it is not required. However, if they do report data, it must be accurate.

Does everyone have a credit report? 

No. If you have no credit accounts, or have only opened accounts with small lenders who do not report to a credit agency, then you may not have a report.

Are all three credit reports the same and where can I get a copy? 

Each credit agency maintains their own credit report for you. For the most part, they should have most of the same information. While all major creditors report to all three agencies (listed above), some smaller lenders and banks may send to only one of the agencies, or none at all. You can get a free credit report from each of the credit agencies once a year through annualcreditreport.com.

You can request all three at once (one from each agency) or you can spread them out through the year by requesting one every four months or so. Be wary of anyone offering to show you your credit report for a fee – you are entitled, by law, to have access for free at annualcreditreport.com.

What if I find errors on my report? 

A credit report can contain inaccuracies. Things like late payments or accounts that aren’t even yours could be on your report. So, it is important to review your reports at least once a year. If you do find an error, report it to the credit agency by mail, phone or online. You will need to provide proof that the information on the report is false or inaccurate.