Credit Repair

What’s in Your Credit Report

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When it comes time to buy your dream home, purchase a new car or start a business, there’s one major hurdle that could hold you back: your credit report.

A credit report is a snapshot of your financial history that helps lenders judge your ability to manage credit and pay off debt. Credit reports include your personal information, your account histories and any negative marks such as bankruptcies or accounts in collection. This information helps lenders determine whether to extend you credit and what rate to charge you — improving your credit score from “fair” to “very good,” for example, could save you money in interest. Read on to understand what your credit report contains, where to get a free copy and how to dispute any inaccuracies you encounter.

What is a credit report?

There are three major credit bureaus that compile credit reports: Equifax, Experian and TransUnion. This means that you have three different credit reports — one from each bureau. Some lenders will look at two or three, while others will look at only one.

Your credit report is not the same thing as your credit score. In fact, your credit report doesn’t even contain your credit score. Credit scores are numbers developed by credit-scoring agencies, such as FICO® and VantageScore, to rate your credit history. Lenders use both your credit report and your credit score to determine your creditworthiness when you apply for new credit.

Your credit report contains the following information.

  • Personal information: This includes your name, address history, phone number and date of birth.
  • Potentially negative marks: You may see a notice at the top of your report regarding any marks contained within it that could be dragging down your credit score, such as past-due accounts.
  • Your account history: Below that, you will see a list of your credit accounts (also known as “tradelines”), including those that have been closed. Each account will include detailed information such as the name and contact information of the creditor, a partial account number, the date it was opened, your payment history, balance and account status.
  • Collections accounts and bankruptcies: If you’ve had any accounts sent to collections, this will appear on your credit report along with the status of the account. Bankruptcies will also show up, although they are the only type of public record that appears on your credit report.
  • Your inquiries: First, you’ll see your hard inquiries. These are inquiries made by lenders because you applied for credit, and they do affect your credit score. After that, you’ll be able to see any soft inquiries. These do not affect your credit score, and only you can see them on your report.
  • Contact information and your rights: Finally, the bottom of your credit report will show a summary of your rights and contact information for the credit bureau, which you can use to dispute any inaccurate information.

Negative accounts, such as those that were past due, accounts sent to collections and Chapter 13 bankruptcies, remain on your credit report for seven years from the original delinquency date. Positive accounts that have been paid and closed, as well as Chapter 7 bankruptcies, stay on your credit report for 10 years. Hard inquiries remain on your credit report for two years.

Will your credit report be the same at all 3 bureaus?

Creditors are not required to report information to all three credit bureaus. Some lenders may report your payments to all three credit bureaus, while others may only report to one or two. Because of this, it’s not uncommon for each of your credit reports to contain different information.

“Credit bureaus are not known for accuracy, or for correcting errors [of their own accord],” said Mike Sullivan, director of education at nonprofit financial education organization Take Charge America, in Phoenix, “so it is necessary to regularly review all three major credit reports.” Fortunately, you can do this for free.

How to get a free credit report from all 3 bureaus

Each of the three major credit bureaus is legally required to provide you with one free credit report every 12 months (at your request). You can order your credit reports online at AnnualCreditReport.com, the only source authorized by the government to provide your free reports. The process is simple.

  • Complete the request form at AnnualCreditReport.com.
  • Select which credit bureaus you’d like to receive a credit report from.
  • Answer security questions. This step is repeated for each bureau you order from.
  • Review and print or save your credit report.

If you prefer to order your reports by phone, you can call 877-322-8228.

How to dispute errors on your credit report

If you’ve ordered your reports online and see potential errors, you may be able to file a dispute online by selecting the erroneous item and clicking “dispute.” The credit bureau will then contact the lender or organization that reported the information and ask them to review their records for accuracy. The results of this investigation will be sent to you by email within 30 days. You’ll need to repeat this process with each credit report that contains inaccurate information.

However, Sullivan warned against relying solely on this online tool. “Doing this online does not provide you with the same proof you get from a mailed dispute letter and proof of receipt,” he said. You can still file a dispute online, he explained, but you should also follow up with the bureau in writing — especially if the issue is significant. If the dispute is resolved in your favor, make sure to check back regularly until your report is corrected.

Who can see your credit report

The Fair Credit Reporting Act places limits on who can see your credit report — a “valid need” must be demonstrated. This “valid need” is typically the consideration of an application you submitted to a lender, employer, landlord or insurer. Employers must receive your written consent before they can view your credit report.

And while creditors and insurers can perform a soft inquiry on your credit report in order to “preapprove” you for potential offers, a formal credit check resulting in a hard inquiry on your report will usually occur only if you’ve filled out and signed an application that includes your Social Security number.

Checking your credit reports annually is crucial to maintaining healthy credit. The quicker you spot and dispute inaccurate information, the smaller the chance it will affect your finances. If those negative marks turn out to be accurate, know that it’s only a matter of time before they fall off of your report. With patience and diligence, you can always repair your credit.

 

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