Understanding Your Credit Report

What Is a Credit Report?

Your credit report is a detailed record of your credit history compiled by credit bureaus. Lenders, landlords, employers, and insurance companies use it to evaluate your financial responsibility and trustworthiness.

The Three Major Credit Bureaus

Three nationwide credit bureaus maintain your credit reports:

Equifax

One of the largest credit reporting agencies, Equifax collects and maintains credit information on over 800 million consumers worldwide.

Experian

Experian serves both consumers and businesses with credit information and analytical tools. It's one of the most widely used bureaus by lenders.

TransUnion

TransUnion provides credit information and information management services, serving consumers in over 30 countries.

Personal Information Section

This section contains identifying information used to match credit records to your file:

• Full Name: Including any name variations or aliases you've used
• Current and Previous Addresses: Your residence history
• Date of Birth: To verify your identity
• Social Security Number: Primary identifier (last 4 digits shown)
• Employment History: Current and previous employers (if reported)

Common Errors in Personal Information

Personal information errors can include:

• Misspelled names or incorrect name variations
• Wrong addresses (may indicate mixed files)
• Incorrect Social Security number
• Outdated employment information

Credit Accounts Section

This is the most detailed section, listing all your credit accounts with extensive information:

Account Types

• Revolving Accounts: Credit cards, retail cards, lines of credit
• Installment Loans: Auto loans, mortgages, student loans, personal loans
• Open Accounts: Accounts that must be paid in full each month

For Each Account, You'll See:

• Creditor Name: The lender or company that issued the credit
• Account Number: Usually partially masked for security
• Account Type: Credit card, mortgage, auto loan, etc.
• Date Opened: When you opened the account
• Credit Limit or Loan Amount: Maximum credit available or original loan amount
• Current Balance: Amount you currently owe
• Payment History: Record of on-time, late, or missed payments
• Account Status: Open, closed, paid off, charged off, etc.
• Responsibility: Individual, joint, authorized user, cosigner

Payment History

Payment history is the most important factor in your credit score, accounting for about 35% of your FICO score.

How Payment History Is Recorded

For each month, your report shows:

• OK or Current: Payment made on time
• 30, 60, 90, 120 days late: How overdue the payment was
• Charge-off: Account written off as uncollectible
• Collection: Sent to collection agency

Credit Inquiries

Inquiries are records of who has accessed your credit report and when.

Hard Inquiries

Occur when you apply for credit and a lender reviews your report:

• Visible to other lenders
• Can impact your credit score
• Remain on report for 2 years
• Multiple inquiries for same purpose within 14-45 days count as one

Soft Inquiries

Occur when you check your own credit or lenders pre-screen you for offers:

• Don't affect your credit score
• Only visible to you
• Include credit monitoring and pre-qualification checks

Public Records

This section includes financial-related public records:

• Bankruptcies: Chapter 7 (stays 10 years), Chapter 13 (stays 7 years)
• Tax Liens: Unpaid federal, state, or local tax debts
• Civil Judgments: Court-ordered debt payments
• Foreclosures: Property repossession due to loan default

Collections

When creditors can't collect payment, they may sell your debt to collection agencies:

• Original creditor information
• Collection agency name
• Amount owed
• Date placed for collection
• Status (paid, unpaid, settled)

How Long Items Stay on Your Report

• Hard Inquiries: 2 years
• Late Payments: 7 years from original delinquency date
• Collections: 7 years from original delinquency date
• Chapter 7 Bankruptcy: 10 years from filing date
• Chapter 13 Bankruptcy: 7 years from filing date
• Foreclosures: 7 years from filing date
• Closed Accounts (positive): 10 years
• Charged-Off Accounts: 7 years

Understanding Account Status Codes

Credit reports use specific terminology to describe account status:

• Current/Paid as Agreed: Account in good standing
• Delinquent: Payment overdue
• Charge-Off: Creditor has written off the debt as uncollectible
• Collection: Debt transferred to collection agency
• Settled: Paid for less than full amount owed
• Closed: Account no longer active

Reading Your Credit Report Correctly

When reviewing your credit report:

• Check all three bureaus - information may vary
• Verify personal information is correct
• Confirm all accounts belong to you
• Check account balances and limits are accurate
• Review payment history for accuracy
• Look for unauthorized inquiries
• Identify any fraudulent accounts

Red Flags to Look For

Warning signs that may indicate errors or fraud:

• Accounts you don't recognize
• Inquiries you didn't authorize
• Incorrect account balances or limits
• Payments marked late that you paid on time
• Accounts showing open that you closed
• Duplicate accounts
• Wrong personal information
• Debts that aren't yours