Credit Report

What’s in a Credit Report?

A credit report is an important document that reflects an individual in a few key ways. Creditors pull up a credit report and credit score to determine if consumers are eligible for new loans, lines of credit or credit cards. Consumers are also eligible for one free credit report each year. Understanding what is within the report will make deciphering the data a little easier.

Information for Identification

A credit report will always have identification information about the person on the account. The information typically includes a name, address, date of birth, Social Security Number, and place of employment.

The identification information is designed to help creditors and consumers find the appropriate report. By using the basic information, it is possible to ensure that the pulled credit information is accurate to the individual.

Credit Information

The credit report contains the most up-to-date credit information on the account. Credit information includes the current accounts that are opened and closed for a certain period of time.

A credit report will show a few key factors relating to the accounts. Understanding what is reported as it relates to the account will give a little more detail about what to look for when reading the report.

The credit report will show when a credit account was opened, the type of account, the credit limit, the amount owed on the account, and the payment history of the account.

As a result of the type of information relating to the accounts, consumers will notice that several pages of data reflect credit accounts. The report will usually reflect seven years of information before the data drops off. This means that even accounts that are paid in full and closed a few years ago will still show up on the report in most situations.

The credit report as it pertains to the account data can seem drawn out because it shows everything from payment history to the date accounts are opened and closed. Despite the concise way of providing information, this will make up the bulk of the credit report data.

Public Records Information

Any information that is contained in public records that relates to an individual is also reflected on the credit report. The public records information is usually a negative aspect on a credit report since most of the records reflect problems.

Information from public records will include bankruptcies, foreclosures, current liens, judgments from a court case, wage attachments, and current debt that is in the collection process.

Depending on the information, the details provided in the report will often vary. In most cases, the report will state the information contained in public records and might have a date, but will otherwise limit the data.

Public records information is usually reflected on a credit report for around seven to 10 years, depending on the particular item. A bankruptcy will also show on the report for 10 years before it is no longer reported.

Credit Inquiries

Any credit inquiry is also reflected on the credit report. Credit inquiries occur when a creditor of any kind requests a credit report and credit score.

Credit inquiries fall into two categories: voluntary and involuntary. These categories are stated in the report to reflect whether the consumer made a request or a company pulled information without consumer knowledge.

Voluntary inquiries occur when consumers are seeking new credit and allow lenders to request a credit report and score. Consumers are the ones who initiate the process and are fully aware that the credit report is being pulled up.

The involuntary inquiries are usually made by creditors for their preapproval offers. The creditor does not inform consumers that they are pulling up the data and consumers do not initiate the process.

While credit inquiries are not necessarily considered a negative, several voluntary inquiries will have an impact on credit scores. Involuntary inquiries will not have the same impact because the consumer does not initiate the process.

A credit report is a reflection of financial obligations. The information contained in the report is primarily related to credit accounts, but it does mention other financial records. Knowing the elements in the report will make reading it a little easier.