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.
A "credit report" is a statement that a credit reporting agency—also known as a credit bureau—makes to someone else about a consumer.
Credit reporting companies 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.
The three nationwide credit reporting bureaus are Equifax, Experian, and TransUnion. Each of them collects data from employers, public records, and creditors, although the information in the three reports can differ to some degree.
A credit report typically includes basic information about a consumer’s debts, creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.
Your credit report includes the following types of information in different sections of the report:
Identifying information. This section typically includes your full name and any aliases; Social Security number (for security reasons, this number will be truncated on the copy provided to you if you request one); current and previous addresses and current phone number; birth date; current and former employers; and your spouse's first name, if you're married.
Credit information. This section 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.
Inquiries. This section includes the names of companies and individuals who have obtained copies of your credit report (called "inquiries"). (To learn more about kinds of information is included in a credit report, and how you can get a free copy of your credit report, see What's in Your Credit Report?)
Credit reporting agencies report information on each of your accounts separately for each creditor that holds or has held that account. Creditors refer to each separate reporting of the account as a “tradeline.”
If a creditor transfers an account to a different creditor, or sells the account to a collector, that new creditor’s or collector's information is reported in a new tradeline. So, you might have more than one tradeline that deals with the same debt.
Here are some guidelines about how long different types of data, including derogatory marks, can stay on your credit report:
Hard inquiries are inquiries by creditors who've requested your report after you've applied for credit with them. These inquiries stay on your report for two years. Too many inquires, which are generated when you apply for credit, can be viewed as negative and hurt your credit score.
Soft inquiries by creditors that request your credit report for promotional purposes, current creditors that review your report periodically to check up on you, and notations when you’ve requested a copy of your own credit report, usually don't show up on your credit report. This kind of inquiry doesn't hurt your credit score.
Credit reports don't 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 others request. 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.
The Fair Credit Reporting Act (FCRA) (15 U.S.C. § 1681 and following) requires credit reporting companies to adopt reasonable procedures for gathering, maintaining, and distributing information and sets accuracy standards for creditors that provide information to credit reporting bureaus.
Under the FCRA, you have the right to dispute all incomplete and inaccurate information in your credit report.