Author: Jennifer Brozic
March 31, 2021
Topics:
Credit ReportIf you’ve ever applied for a loan or line of credit, you probably know that your credit score—which is calculated using information contained in your credit reports—is one of the main factors used to make lending decisions. Understanding what your credit reports say about your borrowing and repayment history can help you better understand how likely you are to be approved for credit and for which rates and terms you may qualify.
If you don’t know which types of information are in your credit report, you could be in for a surprise when you apply for credit. But your credit report doesn’t have to be a mystery. Under the Fair Credit Reporting Act, you’re entitled to receive a free copy of your credit report from each of the three major credit reporting agencies—Equifax®, Experian®, and TransUnion®—every year. Because your payment history plays a large role in determining your credit worthiness to potential lenders, it’s important to review your credit reports regularly to ensure the information in them is accurate. To request your free copies, visit www.annualcreditreport.com.
Credit reports contain four main types of information, all of which should be reviewed for accuracy and completeness, because any errors could affect your credit score.
1. Personal Information
This section of your credit reports contains personal data, including your name, Social Security number, address, previous addresses, birthdate, and employment information. This information isn’t used to calculate your credit score, but it is used to verify your identity. A mistake in this section of your credit reports could be a simple clerical error, or it could be an indication that your credit file has been mixed up with someone else’s or compromised.
2. Account Information
In this section, you’ll find information about open and closed accounts in your name, including:
3. Public Records and Collections
This section contains information that’s a matter of public record with the state and county courts, including bankruptcies, foreclosures, tax liens, and civil judgments. Accounts that have been sent to a collection agency also appear here.
4. Credit Inquiries
This is a list of all the entities that have requested a copy of your credit report, which may include lenders, landlords, employers, and insurance companies to name but a few. These inquiries may be either “hard ” or “soft” in nature, the primary difference being that a hard inquiry could lower your credit score by a few points while a soft inquiry does not affect your credit score.
If you find any inaccurate information in your credit reports, whether it’s an account you didn’t open, inaccurate payment information, or an address where you never lived, it’s important to dispute it and try to get it corrected as soon as possible. To dispute an error on your credit report, contact the credit reporting agency—or all three if the error appears in all three of your credit reports—and, if possible, the party that provided the information in question. The agencies will conduct an investigation and report their findings to you—typically within 30 days.
About the author:
Jennifer BrozicJennifer Brozic began her writing career at seven years old, when she scribed the epic tale of her kite-flying (and skyward-looking) uncle crossing paths with a deep hole in a sandy beach. After earning a degree in journalism, Jen worked in the insurance and financial services industries before earning a master’s degree in communication management. She left the nine-to-five corporate world in 2010 and has been freelance writing ever since. Her areas of expertise include insurance, financial planning & budgeting, and building credit.