What is a Credit Report?
A credit report is a record of how you have paid your credit
card debt and other loans. It shows how much debt you have,
if you have made payments on time, or if you have not paid
back some loans at all. Credit reports don’t show
information about your race, religion, medical history,
personal lifestyle, political preferences, criminal record,
or any other information unrelated to credit.
Credit reports are compiled by national credit-reporting
agencies. The typical credit report includes four types of
information:
- Identifying information: your name, current and previous
addresses, telephone number, Social Security number, date
of birth, and current and previous employers. This information
comes from your credit applications.
- Credit information: specific details about your credit
cards, student loans, and other loans, including date opened,
credit limit or loan amount, balance, and monthly payment.
The report also shows your payment history during the past
several years, and the names of anyone else responsible
for paying the account, such as a spouse or a co-signer.
Late payments, skipped payments, accounts turned over to
a collection agency, and repossessions appear here. This
information comes from companies you do business with.
- Public record information: bankruptcy records, foreclosures,
tax liens for unpaid taxes, monetary court judgments (such
as lawsuits), and, in some states, overdue child support.
- Inquiries: the names of companies that obtained a copy
of your credit report and how often you have applied for
credit in the past two years. When you order a credit report,
you may also see the names of companies that have reviewed
your report in order to make “pre-approved” credit
offers. However, these names will not be given to creditors
who request a copy of your report. Creditors only see the
inquiries you initiate (by applying for a new credit card,
for example.).
Credit reporting agencies sell this information to banks
and other businesses. To decide whether to approve your loan,
these institutions will look at your credit report. Sometimes,
employers will even check a job applicant’s credit
report, because it provides information about a potential
employee’s character. Some landlords do the same. They
usually must get your approval before they can do this. Also,
your insurance company may charge you higher premiums if
you have negative information on your credit report.
You can see how important having a good credit report is
to your financial reputation and your future. Here’s
something else to think about: Even if you’ve been
a model financial citizen, your credit report may contain
serious errors. To make sure your report is accurate, get
a copy of it once a year. You can order your credit report
from any of the three major credit-reporting agencies—Equifax, at
1-800-685-1111, Experian, at
1-888-397-3742, or TransUnion Corporation, at 1-800-888-4213.
|
|
