In today’s culture, not to mention the economy, credit is everything. And so is your credit score. That is one of the main reasons why your credit report is so important. It reflects not only your credit score, but also numerous other things about you that tell potential lenders, mortgage companies, and other creditors whether or not you pose a good risk for their credit.
Actually, your credit report contains an extensive amount of information about you, including the following:
- Personal information: your name, address, date of birth, and Social Security number
- Credit accounts, a/k/a tradelines: list of your current and past credit accounts
- Inquiry information: list of lenders that have obtained a copy of your credit report
- Collection information: list of your past due accounts that were turned over to collection agencies
- Bankruptcy information: any bankruptcy you’re currently in, plus those you have filed in the past
Credit Report Details
With regard to your credit accounts, they are listed by type, such as credit cards, a mortgage, an auto loan, a student loan, etc. For each one, the following information is included:
- The date you opened the account
- Loan amount or, in the case of a credit card, the credit limit
- Current loan balance
- Payment history; i.e., whether or not you made your payments on time
With regard to inquiries, they get broken down into two categories: soft and hard. Soft inquiries include the following:
- Those made by companies that have extended you preapproved credit card offers
- Those made by your current creditors seeking to perform a credit review
- Those made by you to get a copy of your credit history
Only you can see the soft inquiries on your credit report. Potential or current lenders cannot. Nor do soft inquiries affect your credit score.
Hard inquiries, on the other hand, can be seen by any potential or current lender. They are a list of potential lenders who have reviewed your credit history because you applied to them for credit. Hard inquiries do impact your credit score, and they generally stay on your credit report for two years.
Credit Report Time Lengths
Generally, a credit reporting agency can keep most negative information it discovers about you on its credit report for seven years. This includes information about lawsuits in which creditors or others have sued you, plus any outstanding judgments a court imposed on you.
Bankruptcy information, however, can stay on your credit report for 10 years, and other types of information, such as the following, can stay there virtually forever:
- Information about any criminal convictions you have received
- Information about any job(s) you applied for with a $75,000 annual salary or greater
- Information about any application(s) you made for over $150,000 worth of credit or insurance
Getting Your Credit Report
Given that your credit report contains the details of your financial life, you would do well to check it at least once a year to make sure the information it contains is accurate and up to date. You should also check it before you apply for new credit or for a new high-paying job. Other situations under which you likely can get a free copy of your credit report include the following:
- A company denies your credit or insurance application or takes other adverse action against you
- You’re unemployed and intend to go job hunting in the next 60 days
- You’re on welfare
- You suspect you have become the victim of identity theft and someone has stolen your personal information and used it to open new fraudulent accounts in your name
Thanks to the Fair Credit Reporting Act (FCRA), you are entitled to receive a free copy of your credit report each year from the three major credit reporting companies: Equifax, Experian, and TransUnion. You can, however, also get a free credit report from other companies as well.
Disputing Your Credit Report
It goes without saying that inaccurate information on your credit report can negatively impact you in a variety of ways. Not only can it make your credit score lower than it really is, but it also can make it very difficult, if not impossible, for you to get a job, rent an apartment, or get a lower interest rate on your new or existing credit cards.
Per the FCRA, the accuracy of your credit report is the responsibility of both the company that compiles your credit report and the various people, companies, or organizations that provide information to it. If and when you discover inaccurate or incomplete information on your credit report, you should immediately report it to the credit report agency, setting forth which item(s) you think is/are wrong and why.
By law, the credit report company must investigate your claim within 30 days assuming it determines you have a legitimate complaint. It also must send the data you send them to back up your claim to the appropriate organization(s) that supplied the incorrect information. These organizations, too, must investigate your claim and report back to the inquiring credit report company. If the information provider(s) discover that the information really is inaccurate, it/they must correct it and notify all three of the major credit report companies.