What is a Credit Report?
By Attorney Joseph P. McClelland, Esq.
Most importantly it includes a list of all open credit files that you have. In those files that will include the amount of money that you owe the amount of your payments and your payment history by month. Many times the payment history will go back for years.
Your credit report will also include many of your old closed accounts. This will include things that you've paid off and they're no longer reporting. This include things that were charged off after certain. Of time.
Damage to Credit Score
+100 points off your score
+240 points off your score
Your credit report will also include any accounts that are derogatory or not in good standing. This will include accounts that are held by debt collectors generally. Because this information is compiled from many sources it is very common to have one or more errors in your credit report.
If you find such an error, it is your responsibility to notify the credit reporting agencies of the error.
On this website we have included numerous articles about how to dispute your credit report and what to look for in your credit report, and the most common errors that you may find.
Did You Know?
Did you know that one bank alone can make well over $50,000 more in profit off of your mortgage if you have an error on your credit report AND at that at the exact same time, they are the ones paying the credit reporting agencies tons of money?
Can you now see why the system is broken?
There comes a time in every person's adult life where you will need to know your credit status. Do you know yours? It is often something that we like to ignore because we are too worried about what the outcome can be. I mean think about it. Three different credit bureaus can decide your financial fate based on how they deem you have taken care of your credit so far. It also can be scary that they also never agree. This article will take a look at how to read your credit reports and try to help you understand them a little bit more. Maybe by knowing a little bit more about what your report will actually tell you, you will not be scared to check yours.
Your credit report is important because lenders use it to make important decisions when it comes to loaning you money for a new car or home. Credit reports are made up of many components that come together to give companies a picture of your financial history as well as present activity.
Information that makes up your credit report includes:
Personal identifying information - This includes your name, address either the previous one and the current, date of birth, phone number, previous and current, social security number. The name of your spouse may be included as well (depending on the version of the report).
Credit history -bill-paying records with mortgage, banks, stores and others that at point granted credit to you are contained in this section. It consists of information about each account you have such as when it was opened, what type of account it is, how much credit it includes (or the amount of the loan), your monthly payment, etc. If you've closed the account or the loan has been paid off then that information will appear as well. Missed or late payments are also shown in this section.
Public records -it contains information that shows your creditworthiness, such as bankruptcies, judgments fro courts and tax liens. The records are available from public authorities.
Report inquiries - This section includes all credit granters that were authorized to view and access your credit report. In addition, lists of companies that have received your name and address in order to grant you credit are added.
The added companies dot has access to your report, but they can obtain your name and contact information if you meet their criteria for an offer of credit, insurance or other product. This is how "pre-approved" credit card offers are generated.
Dispute statements - it may contain information that you have a disagreement with, in your credit report. The bureau will allow both parties to make statements explain their positions if there is a dispute about items on a report.
Things that don't appear on most credit reports include:
Bank account balances
Health (medical bills can be indicated as debts)
Credit reports are available in different types, depending on the requester. The consumer type indicates the above information and a listing of all inquiries for the report.
The business version includes all of the above information, but only the inquiries made by companies with a "permissible purpose" - this usually means someone with whom you have initiated business.
You've probably also heard the term credit score. Don't confuse your credit score with your credit report. Credit scores are based on formulas that use the information in your report, but they are not a part of your report. The Fair Isaac Corporation (now FICO) came up with a proprietary scoring formula which is used by creditor.
The FICO score narrows down your information to a number consisting of three digits that enables the creditors to determine your creditworthiness. The higher the number the lower the credit risk involved. myFICO.com, have shown that most large banks use FICO formula to determine who to give loan and credit.
Therefore, it is important for you to maintain your credit to the best of your ability because it can have a big impact on your financial future. It is important to keep in mind that there are a lot of scams out there to get you to look at your credit report. Make sure you are requesting and giving your information to reliable sources.
Joseph McClelland is a husband and trial lawyer. Graduate of Loyola University New Orleans School of Law. He currently practices Fair Credit Reporting Act, Telephone Consumer Act, and the Fair Debt Collection Practices Act litigation. Earned the designation of Advocate by the National Institute of Trial Advocacy.