Your credit report is a detailed record of how you've managed your credit over time. Lenders use your credit report -- or the credit score that results from the data in it -- to help them decide whether to grant you credit and, if so, under what terms.
The better your credit report, the more likely your credit request will be granted, and the lower your interest rate will be. Many landlords, employers, and insurance companies also consider an applicant's credit history when making a decision, which makes your credit report either a valuable asset or a liability, depending on its contents.
Because your credit report can have such a great influence on decisions others make about you, it's important to know what your credit report says and how to ensure that the information is accurate.
What Your Credit Report Reveals
Credit reporting companies -- also known as credit bureaus -- gather and sell credit information about U.S. consumers to current and prospective creditors, employers, insurers, government agencies, and "anyone else with a legitimate business need for the information," such as a potential landlord.
There are three nationwide credit bureaus: Equifax, Experian, and TransUnion. Each of them collects data from employers, landlords, public records, and creditors (though the information in the three reports can differ to some degree).
Your credit report includes the following types of information:
Identifying information. This includes your full name and any aliases; Social Security number (for security reasons, this will be omitted on the copy provided to you); current and previous addresses and current phone number; birth date; current and former employers; and your spouse's first name, if you are married.
Credit information. This includes a listing of open, or active, credit accounts as well as closed accounts; account numbers; the date you opened and, if applicable, closed the account; the type of account (mortgage, revolving credit, or student loan, for example); the monthly payment; your credit limit or loan amount and current balance; any co-signers on the loan; and your payment history for the past two years.
Inquiries. This includes the names of companies and individuals who have obtained copies of your credit report ("inquiries") in the past two years.
How Long Does Information Stay on Your Report?
Here are some guidelines about how long different types of data can stay on your credit report:
- "Derogatory" (negative) information can stay on your credit report for up to seven years. This includes late payments, unpaid debts, charge-offs, accounts sent to collections, and judgments against you. If your unpaid debt is turned over to an outside collection agency, that debt could appear twice as a negative on your credit report.
- Bankruptcies can appear for 10 years.
- A foreclosure appears for seven years.
- Most federal student loans typically appear for seven years after the later of the following dates: the date it was first reported to the credit reporting agency, the date when the Dept of Ed took over the loan, or the date you went into default again (if you started repaying after previously being in default).
- Paid tax liens stay for seven years. Unpaid tax liens can remain on your report indefinitely, however often credit reporting agencies will remove them after 15 years. (In 2011 the IRS announced a new program which allows you, in certain circumstances, to get the tax lien off earlier. See How to Remove a Tax Return From Your Credit Report.)
- Favorable information can appear indefinitely, but is, typically, dropped after seven years.
- Inquiries from potential creditors stay on your report for two years. (Too many inquires, which are generated when you apply for credit, can be viewed as negative.)
- All derogatory information -- even data more than seven years old -- may appear in a report provided to an employer if you apply for a job paying $75,000 or more or to a creditor or insurer if you apply for a loan or life insurance policy of $150,000 or more. Although as a practical matter, these items may be deleted after seven or 10 years.
What Your Credit Report Doesn't Reveal
Credit reports do not include information about your race, color, religion, national origin, gender, income, assets, occupation, or receipt of public assistance.
Credit bureaus also omit any information that could reveal a medical condition in reports requested by others. For example, a debt owed to St. Francis Cancer Treatment Center would appear simply as a medical payment. However, if you include a consumer statement in your report that includes medical information (explaining, for example, that you were late with a loan payment because you were undergoing chemotherapy), it will be disclosed to others. (To learn more about consumer statements, see "Consumer Statements," below.)
To learn how to obtain your credit report, see Getting Your Free Credit Report.