Log InJoin 

What Is In A Credit Report?

A credit report is a complete financial overview of the credit activities of any given individual. Three primary credit reporting agencies, Experian, Equifax and TransUnion, are responsible for maintaining and updating credit reports for millions of consumers every day. Financial institutions and other businesses and organizations both report to and look at these credit reports for various purposes. Due to their significance, consumers should review all three credit reports annually.

Credit reports summarize three primary areas of information about an individual some of which is more important than others. Employment history, current and prior residences and lines of credit are all monitored. Employment history and prior residence is more important for employers who wish to conduct background checks to verify information provided on a resume or application is correct. But active and pass lines of credit, also known as a credit history, is the most important which affects all aspects of your life.

A credit history as outlined on a credit report will include every type of recurring or other loan and individual has ever had. This includes car loans, credit cards, merchant cards, mortgages and student loans. Summaries for all of these financial accounts will include specifics such as payment history, whether the account is in good standing and current balance owed on each account. Needless to say, that is a lot of information and a complete picture of a consumer's financial history. When applying for a mortgage or a new credit card, this information will either help or hinder a consumer when seeking lines of credit. Less than perfect credit or a low FICO score can significantly impact your ability to obtain credit and at what interest rate and loan will be issued.

Individuals with bad credit or less than perfect credit will stick out like a sore thumb when reviewing a credit report. Late or missed payments, over the credit limit activity, foreclosure, bankruptcy, charge-offs, repossessed property and other legal judgments will all appear on a credit report. These black marks in their totality can be summarized in what is called a FICO score. FICO scores do not appear on a credit report but can be purchased in addition to receiving a free annual credit report. The scores range between 300 and 850 and most lenders have thresholds of what level of FICO score they will lend to and if they do lend at what interest rate to charge based on where the consumer falls on that scale.

Due to the importance of a credit report, making sure it is true and accurate in all information that appears is critical financially. Not only can black marks from less than perfect credit sabotage a consumer's ability to obtain credit or employment, but great credit could be used by identity thieves for malicious purposes. Look for incorrect or inaccurate information but also keep an eye out for charge accounts and lines of credit you do not remember opening as they may be fraudulent. If you notice these types of accounts, contact the police and provide written documentation to the free credit reporting agencies about the fraudulent activity. Subsequently a fraud alert will be placed on the accounts and your credit report will be frozen so that no new credit can be issued.

The United States government passed a law requiring the three major credit agencies to provide one free credit report each year to consumers. To take advantage of the free annual credit report go online to AnnualCreditReport.com or call (877) 322-8228 to speak with a representative. Be sure to have access to all your financial documents as information from those papers will be used in the verification process to determine if you are who you say you are. If you're curious about your FICO score that can usually be added to the free annual credit report for a nominal fee.

Your credit report is a complete picture of who you are financially and provides significant information and insight as to behavior and responsibility. Make sure your credit report is as accurate as possible because it can affect all aspects of your life from being able to purchase your dream home to landing that perfect job with the big salary.