Credit Report

Credit report summary: 

• A credit report has details of how you use credit now, as well as how you’ve used it in the past.

• Your credit report shows the good and the bad. It’s used to make decisions that could affect your access to credit, employment opportunities, where you live, and how much you pay for insurance.

• Because credit reports are so important, it’s wise to check yours now and then, and correct any inaccuracies.

Credit Report Definition and Meaning

A credit report is a record of how you’ve used credit in the past. Lenders can use credit reports to decide whether they want to loan you money. Other organizations may also use your credit report to make judgments about how reliable you are.

Like any history, a credit record can be good or bad. Either way, it’s good to be aware of what’s on your credit report, because it can affect you in many ways.

Key Features of a Credit Report

A credit report shows how you currently use credit and how you’ve used it in the past. Credit reports also include basic information about you, including the names of past employers and your current and previous known addresses. Here is other information you’ll find on a credit report.

Payment history 

The types and amounts of the payments you’ve made in the past toward your credit accounts, and whether they’ve been late or on time. 

Credit accounts 

The type of account, issuer, and loan amount/credit limit will be shown for each.

Length of credit history 

The age of each of your credit accounts.

Current unpaid debt 

The amounts you owe, the limits on your credit card accounts, and the original amount you borrowed with any loan. 

Type of debt and when it started 

The different kinds of credit accounts you’ve used. The two major types are installment debt and revolving debt.

New applications for credit 

Whether you’ve applied for credit recently.

Collections accounts 

Any unpaid debt that’s been referred to a collection agency.

Bankruptcy, foreclosure, and vehicle repossessions 

These serious derogatory financial events are typically listed on your credit report. 

Types of Credit Reports

Credit reports are created and maintained by the three major reporting agencies:

• Equifax

• Experian

• TransUnion

Each of these bureaus will provide a free credit report upon request, as frequently as once a week. You can get your free copies by visiting AnnualCreditReport.com. Credit reports from each bureau can differ, so it’s wise to periodically check reports from all three.

How Credit Reports Are Used

Credit reports are used for a variety of purposes. In some states, insurance companies are allowed to use your credit report as an aid in determining what premiums to charge you. Landlords can use a credit report to decide whether to rent a property to you, and employers can use them in hiring decisions. Credit reports can also be used to:

• Calculate credit scores

• Decide whether to approve you for a credit card, mortgage, auto loan, or personal loan

• Determine the interest rates you’ll be charged for credit

Credit reports can also be helpful. Without one, it can be difficult to get approved for most types of credit.

Organizations use credit reports to make important judgments about you, so get to know what’s on yours. If you find inaccurate information on your credit report, you can contact the credit bureau that issued the report to get it corrected.