Your credit report is a compilation of information about how you handle debt. It includes information on how much you owe, how you pay your bills, where you live, where you work, whether you filed for bankruptcy and whether you owned a house or a closed vehicle. If it sounds like your credit report contains a lot of information, it’s because it does.
How is information obtained on your credit report?
Credit reports are maintained by companies known as credit bureaus or credit reporting agencies.
The companies you do business with have agreed to submit their debt information to credit bureaus (at least one or maybe all three) who then updates that information in your credit report. Most credit cards and credit orders are updated on a monthly credit report.
Some businesses do not update your credit report with your monthly payments, but will notify credit bureaus when they become seriously irregular in payment. For example, your cable account is not automatically included in your credit report, but if you pay more than six months in the account, the bill may be listed in your credit report as debt collection.
What type of information is included in credit reports?
Credit reports include basic identifying information such as your name, address and place of employment.
Error reports of your name and previous addresses and employers may be listed in your credit report. Sometimes it’s because of a mistake in the business that reported your information. Or, it could be a sign of identity theft.
Your credit report contains detailed information about your credit cards and credits.
For credit cards, your balance, credit limit, account type, account status, and payment history are included in your credit report. The credit balance, original loan amount, and payment history are shown on your credit report.
Public records such as bankruptcy, alienation, refunds and tax credits are listed in a separate section of your credit report.
Credit reports include a list of businesses that recently checked their credit history, either as a result of an app you made or a promotional review. These credit checks are known as inquiries. Your version of your credit report will show inquiries to anyone who has submitted your credit report, including businesses that look at your credit report for promotional purposes. Your lender’s credit report version only shows questions that were completed when you put in some type of application.
Why your credit report is important?
A variety of businesses check your credit report to make decisions about you. Banks check your credit report before granting credit cards and loans, including a mortgage or a car loan. Landowners review your credit report to decide whether to rent for you. Some employers check credit reports as part of the application process.
Your credit report affects many parts of your life, so it is important that the information included is accurate and positive.
Your credit report is the only source of information for your credit score – a number that lenders sometimes use in place of or with your credit report. A credit score is a three-digit number that evaluates your credit report. High credit scores indicate that you have positive information about your credit report, while a low credit score indicates that negative information is present.