If you’ve never requested a credit report before, you may feel overwhelmed wondering what sort of information it contains. In reality, it isn’t overwhelming at all – a credit report is broken down into four simple sections: personal information/identity, credit history, inquiries, and public records. Understanding the information contained in a credit report will make it easier to take control of your credit history, as well as recognize signs of identity theft.
Personal Information/Identity
What personal information is included in your credit report? This section is also known as your identity: your full name, date of birth, full or partial social security number, current address, past addresses, and current and past employers are all included.
Credit History
Also known as your existing credit, this information includes credit information you already have. Bank accounts, credit cards, mortgages and loans all report. Student loans report as well. Some reports “may also include the terms of your credit, how much you owe your creditors, and your history of making payments.” Late payments show up in this section as well, even dates such as opening or closing of accounts.
Credit Report Inquiries
Every time your credit report is requested by a party, an inquiry is recorded on your credit report. Included are all credit grantors who have asked for a copy of the report, and any others authorized to view it. It even includes companies who have requested your personal information to send you offers of credit.
Public Records
Public records are anything that you could request from a court of law. Tax information, judgments against you, bankruptcies, and liens all fall into this category. This information is usually seven years old or less.
Why does this matter?
Your credit report is essentially your financial reputation. Understanding what information is reported to the credit bureaus will help you to make decisions that lend themselves to a good credit score. When checking your credit report it is also important to ensure accuracy. Requesting records from all three of the credit bureaus, and at the same time, will help you ensure that the information contained on all of them is correct and consistent. You may be surprised to find that consistency between the three reports can be lacking – this is because different creditors report to different agencies, at different times, and even different information! If one report is reporting information that isn’t correct, which is possible because people can make mistakes, then you could end up paying more for loans, or having a lower credit score than you would without that mistake.
Another reason to monitor your credit reports is to look for signs of credit fraud or signs of identity theft. Let’s face it, identity theft is a trend we don’t see going away anytime soon – it is even the basis of a feature film. The good news is that actively monitoring your credit will give you notice that something is amiss. Instead of waiting and finding out too little too late, taking an active role in monitoring your credit could save you a lot of stress in the long run. Checking your credit report inquiries list could alert you to someone else attempting to sign up for credit in your name. Looking at your credit history could show you that a new account was opened – that you knew nothing about. Monitoring your credit would give you the notice to immediately take action and halt further credit fraud.
Your credit report is used to determine your credit score, your financial reputation. It is worth it to be proactive and ahead of the game. Further, consumers who actively monitor their credit end up learning more about it than those who don’t– which will also help you in the long run to make the best financial decisions and have the most successful future you can.
Now that you know what it contains and why it’s important will you be actively keeping an eye on your credit report? We welcome your comments.
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