Credit Reports 101

Where Credit Reports Come from and What They Include

Credit Reports 101
January 19, 2016

Remember when teachers would threaten to put something bad on your permanent record? You may not be getting any more report cards, but a credit report is the closest thing law-abiding Americans have to a permanent record, financially speaking. The more you know about credit reports, the better armed you are when it comes to borrowing money through loans and credit cards. Rod Griffin, Director of Public Education for credit-reporting company Experian, "Your credit report should be a tool that works for you; it shouldn't be a mysterious thing."

A credit report contains information that identifies you personally based on a Social Security number, date of birth, past and present addresses, your financial payment information regarding any debts you have incurred and your payment history. The payment history section of a credit report will include such factors as the types and amount of credit you use, how long your credit accounts or your debts have been open, and your level of payments made on time or late.

Having a positive credit report without late payments, bankruptcies, and a high credit score makes getting loans easier and often at lower interest rates. The better a credit score, the more likely a person will be approved for almost any financial transaction they apply for, including apartment rentals, cell phone contracts, auto loans, and even insurance. High scores could even help you get a house or a job!


Who Creates Credit Reports?

There are three primary credit-reporting companies: Equifax, Experian, and TransUnion. They are able to track credit across the United States and provide reports to companies that engage in loans to consumers and businesses. You can see credit reports from all three companies using Credit Manager by MoneyTips.

Credit reports will often contain a credit score that can start as low as 300 and go as high as 850 for somebody with perfect credit. Each lender has their own criteria for determining what level of credit score is acceptable for particular loans. Any time a person applies for credit, the credit agencies may also report this on the credit report, and the application itself could negatively affect that person's credit score.

Understanding a credit report requires finding the single number for the credit score, the details of credit applied for, the amount of credit a person currently has, the payment regularity for the debts, as well as if a person has been arrested or declared bankrupt in the past. All of these factors and potentially others will appear on the credit report and can affect the overall credit score.


Credit Report Errors

According to a variety of studies, there could be well over 40 million credit reports with mistakes. This means that anybody applying for a mortgage, a student loan, a car loan, or even for jobs would be wise to check their credit report to make sure there are no significant errors. Bankrate.com Chief Financial Analyst Greg McBride says, "So often people's credit scores are dragged down through something that they didn't even do. It's because erroneous information was reported. If you're checking your credit reports regularly, you're going to catch that."

The key steps for using a credit report include obtaining a free credit report first, then carefully evaluating all of the records contained on the credit report regarding addresses, credit lines open, payment history, and criminal records, if listed. If you believe there is a mistake on your credit report, you can resolve it with a single click using our credit correction service. Once the inaccurate information has been corrected, it may result in an improvement of your credit score. The Federal Trade Commission provides guidelines for correcting a report here: http://www.consumer.ftc.gov/articles/0151-disputing-errors-credit-reports


What Goes On A Credit Report?

Delinquencies in payments can remain on a report for seven years. Bankruptcies can be found on reports for 10 years and unpaid taxes for 15 years. Inquiries only stay on your report for approximately 2 years.

Understanding and using a credit report to your advantage can be an important step in developing a high credit score. A high credit score will generally lead to lower debt expenses and higher acceptance rates for any form of credit, as well as other perks.

You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips.


Photo ©iStockphoto.com/almagami

  Conversation   |   21 Comments

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Maggie | 05.04.18 @ 21:37
Hi my fico score 642, but I don't see all 3 score
darrell | 05.17.18 @ 02:08
thanks a lot i see what you are tell me
Janice | 05.28.18 @ 22:21
They got my Employer wrong. I’m a Realtor for Keller Williams Realty. I’m an Independent Contractor. I didn’t see my other credit scores. My bank, said I had a credit score of 748.
Kenneth | 05.31.18 @ 13:30
I am tryimg to catch up.
Alicia | 05.31.18 @ 18:06
I need to know how much I owe on my credit
Joyce | 06.01.18 @ 14:05
i need to see all the details of my accounts. How do I go about doing that? ITS NOT SHOWING UP ON my credit manager page.
George | 06.04.18 @ 05:28
Thank you
Jay | 06.22.18 @ 00:32
What is my credit scores
Debra | 06.24.18 @ 04:42
Money tips is it transition, experience or Equifax
isaac | 06.24.18 @ 18:53
why is my scrore so low
Sherry | 06.26.18 @ 18:42
How do I see a list of crefitirs
Barbara | 06.26.18 @ 23:03
Do I haves any Leon’s if so on what and when do they expire
David | 06.29.18 @ 09:12
How long can they stay on my credit
Donna | 06.29.18 @ 12:34
I need go see what's on my credit history I truly think there's things on there that are definitely wrong thank you
Cynthia | 06.30.18 @ 05:12
I want to see the rest of my credit scores
Kevin | 07.01.18 @ 20:13
Address in NC is incorrect, never lived there..
Janice | 07.01.18 @ 22:32
Can I get a credit building loan
Shannon | 07.02.18 @ 12:16
My fico score is 534 but I am missing the other 2
Robert | 07.08.18 @ 12:14
I got a separation n have one acct she took out n I got to clear yet my credit I meed my own credit to edtahlish
Emma | 07.12.18 @ 20:07
If I inquire what the collections are for, does it start the statute of limitations over?
THOMAS | 07.15.18 @ 16:53
A look back on my report will show a score of 100 points and higher. What suddenly happened is this: I was hit directly on my driver's side door at a high rate of speed by the driver who hit me. My Mercedes was totalled, the frame was bent and the arm rest of the door slammed into my side, from which I am still sore six months later. I missed two months of an otherwise well paying job which I have returned to on a limited basis. This fact combined with unexpected high bills has caused the situation. I will recover physically as well as financially, however this small request is simply to tide me over until next payday.
$commenter.renderDisplayableName() | 07.16.18 @ 01:16
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