What's a 3-in-1 Credit Report? (And How Can It Help You?)
Knowing your credit report like the back of your hand is your quickest path to credit solvency – and to a higher credit score.
What's the quickest way to get that job done? It's no secret – get a "three-in-one" (3-in-1) credit report.
A three-in-one credit report is the most effective way of finding out exactly what's being reported about you to each of the credit reporting bureaus. It also helps you see exactly what other lenders, credit organizations and even potential employers will see when they review your credit reports, either for a credit application or even employment. Basically, it's a combination of credit reports from all three credit reporting agencies in one document (more on that in a moment).
The basics involved are fairly simple. A credit score is used by creditors and potential lenders to find out whether or not you'll be a good credit risk. It tells them whether
it's a good bet that you'll pay off that student loan or make payments on that new big screen television in a timely fashion.
Scoring models use a complex algorithm that takes the data included in your credit report and converts it to a three digit number that predicts how likely you are to make your payments on time and fulfill your credit obligations with a lender. There are many different credit scores available on the market but the most widely used by lenders is the FICO score.
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Another little known fact is that you don't only have one credit score. You actually have three. There are three major credit reporting agencies in the United States – Equifax, Experian and TransUnion. And depending on the lender, they may report to one, two –or even all three of them. Interestingly enough, credit reporting is not mandatory and lenders don't have to report your information to all three bureaus. For this reason, the information being reported can vary from bureau to bureau.
Each of these three companies are independent of each other and do not share data. For this reason, a three-in-one credit report that includes the information from all three bureaus into one report can make or break some of your biggest financial moves – from owning a home to opening your own business.
Three-in-one credit reports typically include your credit scores as well. And thankfully, the scores themselves are a little easier to understand. A credit score in the low 600's signals a problem for a lender. That doesn't mean you can't get a loan, but it likely means you'll pay a higher interest rate to get it. On the other hand, a score in the upper 700's is a joy to behold for a lender – and for you too, as you'll probably get the loan at a lower rate since you're such a good credit risk. Don't expect each of the three credit reporting bureaus to give you the same credit score – remember, the information on file at each bureau will likely vary, and so will the scores.
Credit scoring models look at five key characteristics in your credit reports (as follows):
- Payment History: About 35% of your credit score is based on your bill payment history.
- Amounts Owed: About 30% of your score is based on the amount of money you currently owe. Pay close attention to credit card debt and keep your proportion of balances to credit limits on your accounts as low as possible for the most possible points in this category.
- Length of Credit History: About 15% of your score is based on how long you've had credit. Old, established accounts are like manna to your credit scores.
- How Much Credit? About 10% of your score is based on your recent searches for credit. Best rule of thumb here is to apply for credit sparingly – or only when you really need it.
- Types of Credit: About 10% of your score is based on the kinds of credit you have, i.e., car loans, mortgage loans, credit card accounts, school loans and the like. Scoring models are looking for a nice healthy mix here.
You can get a three-in-one credit report online at Credit.com. It's your best bet for getting everything creditors know about you in one tidy package.