What is a Credit Report? (Credit Basics)

A credit report is a record of your credit history, personal information, and employer information as it pertains to various credit cards, loans, or other credit accounts.

Experian, Equifax, and TransUnion are the three major credit bureaus that all creditors and lenders report to. Each month, the three credit bureaus update your credit report based on the information provided by all of your creditors and lenders.

Not all of your creditors and lenders will report your information to all three bureaus. A good way to monitor your credit is to use a reputable service, so you know what is going on with your profile.

There may be information on one report that is not on another, so you must obtain a copy of your credit report from all three bureaus so that you know what is reported to each of them.

What’s Included in a Credit Report?

Your credit report will consist of personal information, credit accounts, loan accounts, and public records. If you are unsure at this point how to read a credit report, let’s first break down how to read one. Everything that lenders and creditors will consider when approving you for a loan is in your credit report, but credit reports aren’t just for lenders and creditors. They also help borrowers clean up their credit or maintain a good credit score.

Personal Information

• Full legal name
• Previous names, aliases, or maiden name
• Current address
• Previous addresses
• Date of birth
• Social security number
• Employer information
• Phone numbers

Credit and Loan Information

• Current credit cards
• Open credit/loan accounts
• Closed credit/loan accounts
• Student loans
• Mortgages
• Auto loans
• Credit/loan account balances
• Credit/loan account payment history
• Credit/loan account age
• Creditor/lender names
• Collection accounts and information

Public Record Information

• Bankruptcies
• Liens
• Foreclosures
• Inquiries
• Civil suits
• Judgments
• Child support payments

Why Do Credit Reports Exist?

Credit reports help creditors and lenders better understand the type of borrower you will be if they approve you for a loan. Your credit report comes with a credit score. Your credit score is the first thing creditors or lenders see on your credit report. The number of your credit score can give creditors an idea of your credit history at a glance, but the report is what tells the whole story.

Each month, creditors and lenders report your personal and account information to the credit bureaus. The credit bureaus take this information and compile a report along with a credit score.

Employers and property management companies may also check your credit report to see if you are qualified for a position or housing.

How to Read Your Credit Report?

You need to obtain your credit report from the three credit bureaus. Experian, Equifax, and TransUnion are all required to provide you with one free credit report each year. We recommend spacing four months in between each credit report so that you get a credit report throughout the year rather than getting all three reports at one time.

The first thing you need to do when you get your credit report is to check it for errors. One in five people will have an error on their credit report, so you must verify all of the information listed within the report, including both personal and account information.

When you notice an error on your credit report, you’ll need to dispute it immediately.

How to Dispute Something on Your Credit Report?

File a dispute with the credit bureau. You’ll have to file a dispute with the credit bureau that reported the error. You can file the dispute in writing or by mail.

1. Experian online form

P.O. Box 4500

Allen, TX  75013

2. Equifax online form

P.O. Box 740256

Atlanta, GA  30374-0256

3. TransUnion online form

P.O. Box 2000

Chester, PA  19016

The credit bureau will require various documents to validate your dispute. Make sure that you include the necessary documents to confirm why your dispute is valid.

2. Wait 30 to 45 days. The credit bureau will investigate your dispute within 30 to 45 days, depending on which credit bureau you are filing your dispute with. Once the credit bureau has completed their investigation, they will notify you within 5 days of their findings. The credit bureau may agree that your dispute is an error and remove the error in question or they may invalidate your dispute and leave the information on your credit report.

3. Check your credit report. If the error is removed from your credit report, you may notice the update to your credit report as soon as the following month. If the error in question relates to a credit or loan account, you may also notice that your credit score has increased from the removal of the error.

How to Review Your Credit History?

Once you have checked your credit history for errors and filed any necessary disputes, you should review your credit history to see in what areas you can make improvements.

Your credit history tells the story of who you are as a borrower. Credit history is important because it can be the key to being approved for a loan or credit card. Because it shows lenders what type of borrower you are, your credit history can mean the difference in getting a low interest rate or a high interest rate.

Credit history refers to every action taken on your loan or credit account, including payments, balances, credit limits, terms, interest rates, and age.

When you have a mature credit history with low balances and high credit limits, you have a low credit utilization rate. A low credit utilization rate combined with mature credit accounts will help you earn a good credit score on your credit report.

Conclusion

You should review your credit report at least once a year to ensure you’re on the right track to build your credit. We recommend obtaining your free credit report from each credit bureau every four months so that you only go four months in between knowing what’s on your credit report. Make sure you review your credit report for errors as well as review your credit history to verify that all your information is correct and that you are making positive steps to increasing your credit score.