What is Credit Report – MoneyPerception

What is a credit report?
A credit report is a record of your credit activities, both currently and in the past several years, that measures your financial responsibility.

How is it made?
When a customer fills out an application for credit from a bank, store, etc., the information is sent to a credit bureau. They match the information on the application with their existing files. This information is then put together in one report. Companies use the report to determine whether or not you are a good candidate for credit or a loan.

What is included in a credit report? There are several pieces of information included in a typical credit report. The most common are:   1. Personal Information – This usually comes from credit applications you have filled out in the past. It may include your name, current and recent addresses, your social security number, date of birth, and current or past employers. 2. Credit History – This is the largest part of your credit report. It includes details about different accounts opened in your name, when they were opened, the credit limit or amount of loan, payment terms, balance, and whether or not you made payments on time. This section also indicates whether you had any loans/payments sent to a collections agency. Closed or inactive accounts can stay on your report for 7 to 11 years after they’re closed. 3. Credit Report Inquiries – Every time someone makes an inquiry about your credit, it is recorded with the reporting agency. These inquiries remain on your report for up to two years. 4. Public Records – This section of the report is taken from government sources, including courts, liens, bankruptcies, overdue child support, etc. Most of this information stays on your report for 7 years.

The report may also include your credit score, which can range from 300 to 850. The higher the score, the better you look to lenders.

What is not included in a credit report?
While your credit history and basic personal information is included in your credit report, there are some things that are left out. For example, any information about your checking or savings accounts is not included in the report. It does not factor in bankruptcies that are over 10 years old. Also, credit reports do not include specific pieces of personal information such as gender, ethnicity, religion, political affiliation, medical history, or any criminal record.

Who can obtain my credit report?
Your credit report isn’t available to just anyone. There are guidelines for who can access your report. Companies who can do this include: creditors who are considering granting you credit or who have in the past, employers, insurance companies, government agencies, and anyone with a legitimate business who needs your credit information, such as a landlord. Private individuals may access your credit report with your written consent.

Why should I get a copy of my credit report? Knowing your credit score has several benefits. 1. It can help you prevent any surprises when you are applying for a loan, credit, etc. If you find out that your credit report reflects negatively on your credit history, you may want to consider taking steps to improve your credit before applying for something big. 2. Reviewing your report can help you determine if there are any errors. Human errors do happen, and they could affect your chances of receiving future credit. If you see an error, you can ask the credit recording bureau to investigate the error and they have 30 days to double check the information.

3. Your credit report can help you protect against identity theft. If there is an unusual activity that you did not know about, it will show up on your report. For example, if someone opened a credit card in your name or took out a loan without your knowledge, it will be on the report.

Where can I get a copy of my credit report? There are three main credit reporting agencies in the United States. They are Experian, Equifax, and TransUnion. You are entitled to a free credit report from each of these companies once a year at www.annualcreditreport.com.

Your information may vary slightly from agency to agency so getting a copy from each company may be beneficial. Keep in mind that these free reports do not include your credit score. Instead, they provide a list of accounts so you can verify that everything is correct.