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What Is a Credit Report?
Credit report is a record past borrowing and repaying characteristics of an individual. The three Credit Bureaus-- TransUnion, Equifax and Experian (formerly TRW) are national credit reporting agencies that keep records on consumers. The credit reporting agencies work with financial institutions, lenders, banks, creditors, insurers, and employers to update your information.
How the system works:
- When you apply for a new credit card the creditor requests a copy of your financial history from the reporting agencies. This causes a "hard inquiry" to be recorded on your credit report.
- The creditor uses your credit reports and scores along with income and debt information to determine what rates to offer.
- You start to use the new credit card and the creditor reports your activities to the credit reporting agencies about every 30 days.
- The credit reporting agencies update your credit report as they receive new information from creditors or lenders.
- Your credit profile changes based on your financial activity. The next time you apply for a credit card or loan, the process repeats.
Your credit report - Your credit report is divided into numerous sections depending on the credit bureau. Those sections are:
- Personal information: name, other names or previous name, social security, date of birth, current address, previous address, phone number, present employment and previous employment
- Account information: adverse accounts, and satisfactory accounts
- Inquiries: regular inquiries, promotional inquiries, and account review inquiries
- Collection: debts that have been turns over to collection agencies
- Public records: bankruptcies, liens or judgments and comes from federal, state or county court records
- Dispute file information: address, phone number, and information for your to dispute any errors
- Negative information:
When you open a new account, miss a payment or more, these sections are updated with new information. Negative records will stay on your credit report for certain periods of time: late payments will stay for 7 years, bankruptcies will stay for 10 years, and tax liens will stay for 15 years. Positive records can remain on your credit report longer. Not all creditors report to all three agencies and the agencies obtain their data independently so your reports from TransUnion, Equifax and Experian could be substantially different from each other.
It's important to check your three credit reports periodically to ensure that the information is accurate and up-to-date. Another reason, the credit report contains information about where you live, how you pay your bills, and whether you've been sued, arrested, or filed for bankruptcies; additionally, the Credit Bureaus sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit card, mortgage loan, auto insurance, life insurance, employment, or renting a home and etc.
The federal Fair Credit Reporting Act (FCRA) promotes the accuracy and privacy of information in the files of the nation's Credit Bureaus.
Most financial advisors and consumer advocates recommend that you need to review your credit report periodically. Why?
- Because the information it contains affects whether you can get a loan-and how much you will have to pay the rate to borrow money.
- To make sure the information is accurate, complete, and up-to-date before you apply for a loan for a major purchase like a house or vehicle, buy insurance, or apply for a job.
- To help you protect against identity theft. Especially, when someone uses your personal information-like your name, your Social Security number, or your credit card number-to commit fraud. Identity thieves may use your information to open a new credit card account in your name. Then, when they don't pay the bills, the delinquent account is reported on your credit report. Inaccurate information like that could affect your ability to get credit, insurance, or even a job.
Those are the important information in your credit report. Take very good care for your credit report. It will help you from financial strain in your life.
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Free Credit Report, Credit report repair, credit report dispute