What is a credit report? Where does the information come from? Who uses it? Read on for answers to your credit report questions! Our credit experts will give you the scoop on credit reports and how they impact your life.
What is a Credit Report?
A credit report is a record of your financial behavior that is kept by credit bureaus and provided to businesses when they want to evaluate potential borrowers. There are three national credit bureaus that maintain credit reports on consumers – TransUnion, Equifax and Experian.
What Does a Credit Report Include?
Credit reports include your name, current and former address, employment, credit and loan histories, inquiries, collection records and public records such as bankruptcy filings and tax liens. Each of your credit card and loan records shows your payment history going back 7 years along with other account details such as your credit limit.
What Does a Credit Report Look Like?
Your credit data can be presented in different forms based on where you obtain your report. In its most basic form, your credit data is printed out as pages of confusing codes and abbreviations that only make sense to a lender. Luckily, consumer credit reports are translated into easy-to-read formats.
How Does Information Get on My Report?
Credit card companies and lenders report your account information to credit bureaus electronically. There’s no fixed schedule for this reporting, but most companies send an update every 30 days. Other records are sent by the courts, tax agencies, and post office.
How Long Does Information Stay on My Report?
Most information stays on your credit report for 7 years. Personal data (address, name, etc.) and positive records don’t have predetermined expiration terms. Negative records on your credit report have set expiration terms:
- Bankruptcy: Ten years for Chapter 7 filings, seven years for Chapter 13 filings and seven years for each record marked as “Included in BK”
- Charge-offs: Seven years
- Closed accounts: Seven years if the account was paid late, no expiration date if the account was always paid on time
- Collection accounts: Seven years from the last late payment on the original account
- Inquiries: Two years
- Late payments: Seven years from the date of the late payment
- Judgments: Seven years from the filing date
- Tax liens: Fifteen or more years if left unpaid, seven years from the date the lien is paid
How Can I Get Information Off My Report?
You can remove inaccurate, fraudulent, or expired information from your credit report by submitting a dispute request to the credit bureau. You’ll need to submit a separate letter for each credit bureau. The credit bureaus have 30 days to investigate your dispute. If they can confirm that the information is inaccurate, they’ll remove it and send you a letter with an updated report. If they can’t confirm the correction, they’ll send you a letter of explanation. Accurate information cannot be removed from your credit report before its set expiration date.
Who Uses My Credit Report?
Credit reports are used by creditors, lenders, insurers, employers, courts, landlords, cell phone companies, and utility companies. Under “permissible purpose” laws these businesses have legal access to your credit files for the purpose of evaluating your finances and determining your rates. In most cases, your authorization is required before they can request your data.
What Can I Do to Manage My Credit?
The most important thing you can do to keep your credit healthy is to check your credit report every 6-12 months. Regular credit checks help you to spot inaccuracies and signs of identity theft before they cause major financial damage. Keeping your credit reports healthy and positive can help you save thousands on life’s big purchases.
Now that all your credit questions have been answered, you are ready to take charge of your own credit.
You can check your credit score each month using Credit.com’s free Credit Report Card. This completely free tool will break down your credit score into sections and give you a grade for each. You’ll see, for example, how your payment history, debt and other factors affect your score, and you’ll get recommendations for steps you may want to consider to address problems. In addition, you’ll also find credit offers from lenders who may be willing to offer you credit. Checking your own credit reports and scores does not affect your credit score in any way.