Credit Reports

Who rates your credit and why is it important? Get a grip on the basics and credit standings whether you are establishing credit for the first time or rebuilding your credit.

 Your personal credit report:

  • Federal district bankruptcy records and state and county court records of tax liens and monetary judgments. This information comes from public records.
  • Specific information about each account, such as the date opened, credit limit or loan amount, balance, monthly payment and payment pattern during the past several years. This information comes from companies that do business with you.
  • The names of those who have obtained a copy of your credit report. (On your copy of your Experian credit report, addresses are included.) This information comes from the credit reporting agency.
  • Your name, current and previous addresses, phone number, Social Security number, date of birth and current and previous employers. Your spouse's name may appear on your version of the credit report, but it will not appear on the version that is provided to others. This information comes in part from your credit applications, so its accuracy depends on your filling out the forms clearly, completely and consistently each time you apply for credit.
  • Statements of dispute, which allow both consumers and creditors to report the factual history of an account. Statements of dispute are added after a consumer officially disputes the status of an account, the account has been reinvestigated, and the consumer and creditor cannot agree about the account status. Both the consumer's and creditor's statements of the account status will appear on the credit report.

CORRECTING ERRORS ON YOUR CREDIT REPORT

Itís a good idea to check your credit reports from time-totime to make sure all information is accurate. Errors can, and do, occur. A good time to check your reports is before applying for a mortgage, auto or other loan. Correcting errors beforehand will make your loan application process much easier. If you have been denied credit and have not reviewed your credit reports, you should do so to make sure they are accurate. You are entitled to receive a free copy if you were denied credit.

When you find something wrong on your credit bureau report, you have the right to challenge it. Submit your challenge in writing to the credit bureau, briefly explaining the issue. Include copies (not originals) of any documents that support your position. By law, the credit bureau must include this in your file, investigate your complaint (unless they consider it frivolous), and either verify the item in question or remove it from your file. At your request, the credit bureau will send a corrected copy of your report to anyone who received it in the past six months.

How long does information stay on your credit report?

Positive information stays on your credit bureau report indefinitely, although information about an account comes off after about seven years if no new information is added. Negative information, such as late or inconsistent credit payments, will stay on your credit report for at least seven years, as does public record information such as tax liens and delinquent child support payments. Bankruptcies, foreclosures and judgements can stay on your credit bureau report for up to ten years, and information regarding a criminal conviction has no time limit. Most inquiries stay on a credit report for up to two years.

Is your credit bureau report private?

Federal law carefully regulates how credit reports can be used and by whom. Businesses must meet certain requirements before they can access consumer credit information. These requirements usually include:

  • Proof of a permissible purpose under federal law
  • A background check and on-site inspection of the business
  • A current business license
  • A signed contract requiring the business to use the data properly

WHAT ARE CREDIT BUREAU REPORTS?

Lenders generally donít have the time to personally investigate credit histories. Instead, they rely on credit reports from one of the credit bureaus that collect and sell this information.

A credit report is essentially a "report card" on how you have handled credit in the past. Credit reports contain four types of information: identifying information, credit information, public record information and inquiries.

     Identifying information
     This includes:

  • Your name
  • Your current and previous addresses
  • Your Social Security number
  • Your year of birth
  • Your current and previous employers
  • If youíre married, your spouseís name

     Credit information
     This includes credit accounts or loans you have with:

  • Banks, finance companies or credit unions
  • Retailers
  • Credit card issuers
  • Other lenders

     Public record information
     This includes any information thatís contained in state and county court records, such as:

  • Bankruptcies
  • Tax liens
  • Monetary judgments
  • Delinquent child support

    Credit inquiries

     These indicate to other lenders that you have applied for new credit (which could result in
     additional debt). Potential lenders view multiple recent inquiries on your credit report as a
     sign that you may be overextending yourself.

     Other areas of interest: