Credit Report Basics
by Credit.com
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?
Checking your credit report every 6-12 months is the most
important thing you can do to keep your credit healthy. Regular credit check-ups
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 easily order your credit reports from all
three credit bureaus online. Credit.com has developed a comparison
chart of credit report services to help you decide which type of credit
report product is right for you. Take advantage of Credit.com’s secure
internet zone and get started online today!
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