What Is A Credit Report And Why Should You Check It?

Learn More About Credit Reports

The credit report definition is a detailed information sheet that shows a person’s entire credit history. Information is collected by credit bureaus and then use this information in order to create these reports. These reports along with other information are then used by lenders to determine the creditworthiness of a loan applicant.

Breaking Down Credit Reports

A credit report will include a lot of personal information. This includes both your current as well as any previous addresses. Employment history as well as your social security number are also on these reports.

Additionally, the credit report will include your entire credit history summary. This information will be about the number of accounts that you have, the types of accounts you have, as well as information about these accounts such as whether or not they are in good standing or if they are past due.

There will be detailed information related to the date the account was open, what the credit limits are, as well as if you have high balances on any of the accounts. In addition, any inquiries about your account will be listed. Any details about accounts that have been turned over to a credit agency will be provided as well. This includes information about wage garnishments and liens.

Credit Report Analyzing

Typically, a credit report will retain all negative information on an account for up to seven years and a bankruptcy filing will stay on a credit report for around ten years. If there is information over seven years on your credit report you can dispute this information and often times have it removed, depending on what type of negative information that it is.

Credit Report Access

If a person submits an application for any type of credit, a rental property, or an insurance policy, an insurer, creditor, landlord, as well as a select number of others will be able to legally access their credit report. The list of who can access your credit report is actually fairly small and you do have to provide written permission in order for any individual to be able to view your report.

Bi Monthly Payments

Some employers may ask for a copy of a person’s credit report if the individual agrees and provides permission to the employer in writing. Each of these entities typically will have to pay for the reports from the credit bureau, which is how these companies earn money.

Free Credit Reports

Each of the 3 credit reporting bureaus in the United States are required by law to provide consumers with one free credit report every year. Federal law also requires that a consumer have access to a credit report if there has been any type of negative action taken against them. This includes being denied credit, denial of employment, or denial of insurance, as well as any reports from judgements or collection agencies.

If a negative action has been taken against you, a report must be requested within sixty days from the date the action took place.

Reading Credit Reports

Typically, when looking at a credit report you will see four sections of information. The top part of the report will provide personal information about the individual. This information may include their social security number, any name variances, as well as current and previous addresses.

Good Credit Report

The next section will make up the bulk of the report and includes information about different lines of credit. The next session includes any public records such as tax liens, judgements, and bankruptcies. The final section of the report has a list of all of the companies and other entities that have inquired about a person’s credit in the recent past.

Credit Reporting Agencies

There are 3 major credit reporting agencies in the United States. These are TransUnion, Experian, and Equifax. Each of these 3 reporting agencies collect information about a person’s personal details including their bill payment habits in order to create their credit report.

While most of the information provided by all 3 of the major credit reporting agencies is similar, there are some differences between the 3 reports.

All Credit Unions

Each of the credit reporting agencies can be contacted directly if there is a need to place a fraud alert on your account, freeze your credit line, or if you find any false information in your credit report.

Equifax Credit Report

Equifax has its headquarters in Atlanta, Georgia and currently has investments in 24 countries located in South, Central, and North America. The company is a member of the S&P 500 index and is traded as a common stock on the New York Stock Exchange. There are around 9200 people employed by the company throughout the world.

Experian Credit Report

Experian has its corporate headquarters located in Dublin, Ireland. The company also has operational headquarters located in California in the United States, Nottingham in the United Kingdom, and in Sao Paulo, Brazil. The company operates in 37 countries and employs around 17,000 people throughout the world.

Logo of Experian

Experian is listed on the London Stock Exchange and is a part of the FTSE 100 index.

Transunion Credit Report

TransUnion was created as a holding company for Union Tank Car Company in the year 1968. The following year the company acquired the CBCC, which maintained over 3.6 million card files manually. Not long after this acquisition, Transunion became the first company in the industry of credit reporting to replace account receivable data with an automatic tape to disc transfer. This cut the time and the cost of updating consumer files.

Logo of Transunion

Today, TransUnion is traded on the New York Stock Exchange. The company has operations in 33 countries throughout the world.

How Do I Order My Free Report?

The three bureaus listed above have a central website that can be used in order to get your credit report. There is also a toll free number available that you can call and order your free report. Another option is to order your free credit report through the mail.

​1-877-322-8228

You can also visit annualcreditreport.com in order to obtain your free credit report online. If preferred, you may complete the request form on the website and then mail the form to:

Annual Credit Report Request

P.O. Box 105281

Atlanta, GA 30348.

To obtain a free credit report you do not need to contact the credit reporting companies directly as they are only providing the free reports each year through this site. You have the option of obtaining all three of your reports at the same time or you can also choose to order the reports one at a time. Access to each report is available once every 12 months.

Beware Of Imposter Websites

There is only one official website that is allowed to provide the free yearly credit report that is entitled to you under the law and that is annualcreditreport.com. There are other websites that claim to provide free credit reports, or free credit monitoring, or free credit scores. All of these sites are not part of the federally mandated free report card.

On many of these sites the advertised free service comes with some strings attached. These “strings” may include a free report, but then you will have to pay for a service after the trial period. If you are not careful you may end up providing permission for these companies to charge fees to your credit cards.

Avoiding Fraud

There are some imposter sites that use “free report” within their name and others that have misspelled annual credit report in their url. Some sites will direct you to another site that will attempt to sell you something or that will collect personal information about you.

If you are on a site and see pop up ads, receive an email, or get a phone call from someone that claims to be from annualcreditreport.com or one of the 3 national credit reporting agencies, do not reply to the email or click on any links as it is likely a scam. Fraudulent emails should be forwarded to spam@uce.gov.

How Long Does It Take To Get A Credit Report

If you request an online credit report you should have immediate access to it. If you order your report over the phone it will be processed and mailed out to you within 15 days. If you order your credit report through the mail it will be mailed out to you within 15 days of being received.

Purchasing A Credit Report

If you have already received your free annual credit report for the year and you want to purchase a copy of your report you can contact the 3 credit reporting agencies directly in order to obtain a copy.

Contact information for the three agencies is:

  • Experian: experian.com or by phone at 1-888-397-3742
  • Equifax: equifax.com or by phone at 1-800-685-1111
  • TransUnion: transunion.com or by phone at 1-800-916-8800

Spotting Errors On Your Credit Report

It is estimated that one out of every four consumers in the United States have errors on their credit reports. What is an error? To put it simply, an error is any information that is found on your credit report that should not be.

This information may be someone else’s, it could be information that is against the law to be on a credit report, or it could simply not be reported correctly. There are several common credit report mistakes including:

Errors Related To Accounts

Some common errors that are related to accounts include late payments that are over seven years old, having loan or credit card accounts listed that do not belong to you or that you are not an authorized user on, accounts that you have closed, but the provider listed it as they have closed it.

Three Credit Report Errors

Derogatory Mark Errors

Some common derogatory mark errors include paid off collection accounts that are showing up as unpaid, paid tax liens that are over seven years past the payment date, accounts that were discharged in a bankruptcy showing up as being active and containing a balance.

Personal Information Errors

Make sure to look over your personal information to insure that your correct name is listed and all of the addresses that are on the report are in fact places that you have resided currently or in the past. It is also important to look over employer information to make sure that it is accurate as well.

Derogatory mark errors as well as any account related errors can affect your overall credit score. Since your credit score determines whether or not you are approved for a loan or more credit, it is important to make sure that all of this information is correct. A personal information error will not typically affect your score, but they could alert you to possible fraud or other reporting issues.

What To Do If You Find Errors In Your Credit Report

Under federal law the information provider as well as the credit reporting agency are responsible for making any corrections to any information that is incomplete or inaccurate on your credit report.

If you find false information on your credit report there are several steps that you should take.

  • 1. Contact the credit reporting agency in writing about the information that you think is incorrect.
  • 2. When you complaint is received the credit reporting company is required to investigate the items that you have questioned within 30 days of receiving your dispute. If they feel the dispute is frivolous they do not have to investigate it.
  • 3. The credit reporting agency will then provide the information provider with the notice of a dispute. The information provider will then conduct an investigation as well.
  • 4. The information provider will then report its findings to the credit reporting agency.
CC Disputes
  • 5. If it is found that the disputed information is not correct, the information provider will then have to contact all 3 of the credit reporting agencies so that the information can be corrected on your credit report.

Once the investigation is completed the credit reporting agency will be required to give you the written results of the investigation as well as a copy of your report if there are changes made as a result of the dispute.

Once a disputed item has been removed or changed in any way, the disputed information cannot be put back in your report. However, if the disputed information is verified and found to be correct, it will remain in your credit report.

MSI Will do Your Credit Dispute

While the first step is to provide a written letter of dispute to the credit reporting agency. It is also important to file a report with the credit information provider as well. This is to ensure that the information provider does in fact receive the notice of dispute and all of the information that you have provided about why the information is false.

When Information Is Not Corrected

If you dispute an item and the information providers and credit reporting agencies will not correct the information, there is one thing that you can do. You may request that a copy of your dispute be included with your file and with all future reports.

Negative information that is accurate can be found on a credit report for seven years. Information about a bankruptcy can remain on your credit report for ten years.

Dispute Follow Up

When filing a dispute it is important to make sure that you follow up with it after you have sent in your information. As mentioned, an investigation should be started within 30 days after the companies receive the information about the disputed items.

Typically, the majority of disputes made are resolved within a two week time span. The time it takes to resolve an error will depend on what type of error that it is.

Credit Report Cleaning

If the dispute is over public records, inquiries, or your personal information, a credit bureau will often simply look over this type of issue themselves and around fifteen percent of the time will not even involve the reporting agency.

If the information about the dispute needs to be sent to the data furnisher, resolving the dispute can take a longer amount of time as the data provider will need to investigate the dispute as well.

It is important to note that if you are disputing items on your credit report and a company requests a copy of your credit report during this time, the information that is involved in the dispute should be noted on the report that is provided.

If more than 30 days have passed and you have not heard from the credit reporting agency about your dispute you can call them or contact them to discuss what is going on with the dispute.

If you disagree with the result of the investigation, there are further steps that you can take to try to get the issue resolved such as contacting the agencies to discuss the issue and if nothing else adding a notation to your credit report about the disputed items.

More Information

The federal trade commission or FTC works for consumers. The job of this agency is to prevent deceptive, unfair, and fraudulent business practices that take place in the marketplace. In addition, the FTC provides information to consumers in order to help them be able to spot scams, avoid them, and stop them.

If you have a complaint about any business involving your credit, you can file a complaint at ftc.gov.complaint.

If you have been involved in any type of scam it is important to make sure that you report it. You should report it to the FTC, but also to your local consumer reporting agency as well. This can help save someone else the time and hassle that you are going through and it is also the best way to try to get your money back that you may have lost due to the scam.

Conclusion

A credit report is a very important document in an adult’s life. This report is not only what it used to determine a person’s credit score, but it is also considered by lenders and even some employers to determine the potential worthiness of the consumer or potential employee.

25 %
Reports Have Errors

A credit report contains a lot of personal information and it is important to make sure that all of the information in your credit report is correct. There are mistakes in almost 25 percent of all credit reports. This means that one out of every four people has false information in their credit report.

The credit reporting agencies are required by law to provide you with a copy of your credit report once a year. You can choose to receive all of your reports at one time or you can stagger them out throughout the year. Many financial advisors tell clients to pull a credit report from one company every four years.

Since these reporting agencies offer reports that are very similar, pulling one every four months provides you with more opportunities to note any changes in your most current reports. This is one of the best ways to make sure that your credit report is as accurate as possible at all times.

Your Credit Blog Approved

If you find incorrect information in your credit report it is important to dispute this information. Incorrect information can negatively affect your credit health as well as your financial future.

A lower credit score results in the possibility of not being approved for the credit that you need and if you are approved you may end up paying a higher interest rate. This can cause you to put your credit at great risk as you may not be able to afford these higher rates.

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