What is a credit report?

So what is a credit report anyway? Simply put, a credit report is a snapshot of your credit history (credit and loan applications, credit cards, loans and mortgages) and contains your history of making or not making payments on time. It is also contains a limited set of public information about you.

Where does the information on my credit report come from?

Your credit report is compiled from two main sources:

1. Public Records:

• Electoral roll information
• Court Judgments
• Voluntary Arrangements (an agreement to pay off a debt)
• Bankruptcies
• Foreclosures
• Tax Liens
• Garnishments
• Repossessions
• Charge Offs

2. Information provided by Lenders and Financial Institutions:

• Credit and Loan Applications
• Credit Card Companies
• Mortgage Companies
• Lending Institutions

Who is responsible for tracking the information on my credit report?

The agencies that maintain the information on your credit report go by several different names (Credit Bureau, Credit Bureaus, Credit Agency, Credit Agencies, Credit Reporting Agency, Credit Reporting Agencies or even Credit Reference Agency or Agencies). Bottom-line, they are all one in the same. There are three main credit reporting agencies (Equifax, Experian and Transunion). Follow the the link for more information about the three credit agencies.

The credit reporting agencies are responsible for storing and maintaining accurate information about your credit history. The credit reporting agencies make money by setting up contracts to sell credit reports to businesses that want to lend you money, give you a utility or extend you credit. Credit reports allow your potential creditors or lenders to make quick decisions about the risk they are taking and if you will pay them consistently and on time. Every business uses a different credit reporting agency, so the information reported and tracked by each agency can vary depending on their contractual relationships.

What specific information is on my credit report?

Your credit report contains the following information:

Personal Information:

• Name / Aliases
• Addresses for the last six years
• Social Security Number
• Date of Birth
• Employment History

Account Summaries:

• Summary of Revolving Credit Accounts such as credit cards
• Mortgage Accounts
• Installment Accounts such as bank loans

Account Details:

• Credit Limits and Loan Amounts
• Current Balance
• High Balance - the highest amount of the credit limit that you have used
• How long the account has been open
• Your payment history
• History of late payments
• History of on time payments
• Collections
• Charge Offs

Inquiries:

• When you apply for credit or a loan, you authorize the lender to ask for a copy of your credit report. These inquiries show up on your credit report.
• Contains all the inquiries for the last two years

Public Records:

• Court Judgments
• Voluntary Arrangements (an agreement to pay off a debt)
• Bankruptcies
• Foreclosures
• Tax Liens
• Garnishments
• Repossessions
• Charge Offs

How is my credit report used and how does it impact my life?

Your credit report can be used when you apply for a loan, mortgage, utility, insurance, job or credit and your credit report controls:

• Whether or not you will get the loan, mortgage, utility (cell phone service, cable, electricity, broadband, etc), job, insurance or credit you want
• If you will be able to rent an apartment or home
• If and how much of a deposit or premium you have to pay when buying a house, getting insurance, renting an apartment, buying a car, or setting up a utility service
• How much money a creditor or lender is willing to give you
• The interest rate you will pay for the pleasure of using a credit card or a loan

What a credit report is not?

Some people mistakenly believe that a credit report tracks much more personal information. A credit report does not track any of the following:

• Your relationship preferences
• You bad habits outside of your finances
• Your job performance
• How much money you have in the bank

Well, that about covers credit reports. Stay tuned for more posts about fine tuning and reading your credit report.