Because the wealth of information it contains can decide how much loan you can get, how much you pay for a certain service, if you will be able to rent your favorite apartment or even if you can get a particular job! Starting from a small car loan to a major house purchase, creditors check this little report and decide how “Credit worthy” you are. That credit worthiness dictates (along with some other factors like income) the loan amount, interest rate, insurance premium or even if that dream job will be offered to you! No one wants to overpay! Do you?
There is another compelling reason to know your credit history – Identity theft. Even if you hate credit cards and never want any kind of credit in life, you might still want to know what is in your report. Some one else might be borrowing in your name and using your information. Unless you catch it early, creditors will soon start calling you when the identity thief goes on a shopping spree with a credit card opened under your name.
So what is in a credit report?
Credit report is basically a record of all your credit activities. It has your entire credit profile.
- Full Name
- Other names used
- Social Security number
- Current and previous Addresses
- Current and past employers
- Date of Birth
- Tax liens
- State and County records
- Overdue Child Support
- Judgments (Example : Some one sued you in a small claims court and won a judgment of $5000)
- Creditors Name
- Account Type – Revolving (Credit cards), Auto loans (Installment)
- Account Number
- Date the account was opened
- Balances Amount & Date reported
- Account Status (Delinquent, paid satisfactorily, settled,…)
- Ownership (Joint/Individual/Authorized User)
- Credit Limit/Loan Amount
- Monthly Payment
- Past Due
- Prior Delinquency
- Payment History – Monthly payment history
- Comments – Any comments from the creditor about your account
- List of all the parties that have obtained your credit report in the past 2 yrs. This does not include the inquiries (aka soft inquiries) made by creditors for promotional or pre-approval purposes. This list has all the inquiries (aka hard inquiries) made to extend credit to you.
- If you have negative information in your credit report, according to the Fair Credit Reporting Act (FCRA), you have the right to have an explanation added to your credit report. For example, if you had a lot of late payments, you can explain that you had lost your job at that time and paid everything back as soon as you got a job. This won’t change the poor credit rating, but the creditor will also get your explanation as part of your report. So some creditors might choose to ignore the negative items if the explanation is reasonable.
Who has all this information about me?
A Credit Bureau or a Credit Reporting Agency (CRA) collects all the financial information, stores it, formats it and sells it for a fee. There are three major agencies that are widely used – Experian, Transunion & Equifax, although there are few smaller companies that cater to local markets.
How do these people get my information?
The CRA collects the information from all the creditors that have extended credit for you (the bank that graciously gave you your auto loan, departmental store that issued you your credit card, etc.) and public records.
Can anyone see this information?
According to the privacy rights clearinghouse – Anyone with a “legitimate business need” can gain access to your credit history, including:
- Those considering granting you credit.
- Insurance companies.
- Employers and potential employers (but only with your consent).
- Companies with which you have a credit account for account monitoring purposes.
- Those considering your application for a government license or benefit if the agency is required to consider your financial status.
- A state or local child support enforcement agency.
- Any government agency (limited usually to your name, address, former addresses, current and former employers).
Can I see my report?
Absolutely. It is highly recommended that you do so. You are entitled to receive one free credit report every 12 months from each of the nationwide consumer credit reporting companies—Equifax, Experian and TransUnion. This free credit report can be requested through www.annualcreditreport.com. You can also request your report by calling 1-877-322-8228 or by mailing the request form to this address –
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
You can get a copy from each of the 3 credit agency every year. So you can get all of them at once or time them so you can request one report every 4 months.
Note: www.annualcreditreport.com is the only place where you can get your credit reports truly free of charge. All the other sites that claim to provide free credit reports are merely a trial for some kind of credit monitoring service.
I see an error in my report. What do I do?
Make efforts to correct it. Immediately.
- Contact the credit reporting agency and report the error. The company has to research and respond to your request, they do so usually within 30 days.
- Contact the credit company (either your credit card company or the bank) and dispute the offending item.
How long will my information stay on the record?
Its usually 7 yrs unless its bankruptcy in which case the information about the bankruptcy will be available for 10 yrs.
Don’t wait until you need a reason to check your credit report! Make a note to request your credit report periodically and make sure they are accurate!