In order to use your credit wisely, it’s important to know what’s in your credit report. Here’s how to better understand what’s in a credit report and why it’s important.
Your credit score isn’t the end all be all of your credit report. If you take a closer look you’ll gain some clarity into why you may have been denied a loan, discover whether or not someone has used your name to fraudulently apply for a loan, and how negative factors might be affecting your credit.
Equifax, TransUnion, and Experian all collect information from creditors on the status of your accounts. This information includes your credit history and activity. Based on this information, they determine how much of a risk you represent to them. The lenders will then determine the amount of credit they will give you, and the interest rate they are willing to offer. A landlord may also review your credit report for risk, as well as insurance companies, cell phone providers, and even some employers.
For these reasons it’s very important to know exactly what’s in your credit report. Let's take a look at what's in your credit report and why it matters.
There are six different sections in a typical consumer credit report.
Section One: Your Personal Information
This section may include your social security number, your full name, your date of birth, current and past addresses, and phone number. If you find that any of this information is incorrect, it’s important to update it with the credit bureau or file a dispute to change it. If you find inaccurate information about an account, then you should contact the creditor that reported the incorrect information and ask them to send an update to the proper credit bureau with corrected information.
Section Two: Employment History
Sometimes this is included under personal information, sometimes not. If you find outdated or incorrect information here, you can file a dispute - but it usually isn’t that important. This information is most likely to be used to confirm your identity.
Section Three: Consumer Statements
This section keeps tracks of any disputes you’ve filed with the credit bureau. If you disputed something and the investigation found nothing, this section would explain how and why you disagree with the information on your credit report.
Section Four: Account Information
This contains your account’s specific details. It shows closed accounts, open accounts, the dates of opening or closing said accounts, your credit utilization, your payment history, the status of your loan payments, and your current account balance.
This section also shows if you are paying your bills in full and on time, or if you have a delinquent account that has gone into collections. This information can stay on your report for seven years before the credit bureau removes it, so it’s important to stay on top of your payments!
It’s also important to watch for the following types of errors that are commonly found on credit reports:
Accounts you didn’t create. This can indicate identity theft.
Accounts that aren’t yours, but belong to someone with the same name.
Incorrect or inaccurate payment history.
An incorrect credit limit or the wrong balance.
Incorrect data that was already corrected but was entered back in at a later date.
Section Five: Public Records
This section may include foreclosures, tax liens, bankruptcies, and civil judgements. All of these can lower your credit score.
Section Six: Inquiries
Hard inquiries can lower your credit score. These inquiries show up after someone applies for credit in your name. It can be an indication of identity theft if you find an unauthorized hard inquiry on your credit report, and you can have unauthorized inquiries removed from your credit report by filing a dispute.
Where You Can Get Your Credit Report
AnnualCreditReport.com is a free site many people use to check their credit, but it does not include your credit scores. For a fee, you can get your credit reports and credit scores (including your FICO score, which is what most lenders use) directly from each credit bureau. There are also many other companies which can give you a 3-bureau credit report which shows your full report from TransUnion, Experian, and Equifax.
Understanding your credit report can help you improve your credit score, and help you keep an eye on any fraud or identity theft. We recommend checking your credit report regularly for errors, and enrolling in a credit monitoring service to alert you of any changes to your score or account information.