Credit Report

A credit report is a detailed report of an individual's credit history. Credit bureaus collect loan and payment activity and create credit reports based on that information. Lenders use the reports along with other details to determine a loan applicants' creditworthiness. In the United States, there are three major credit reporting bureaus: Equifax, Experian and TransUnion. Each of these reporting agencies collects information about consumers' personal details and their bill-paying habits to create a unique credit report; although most of the information is similar, there are often small differences between the three reports.

Credit reports include personal information such as current and previous addresses, Social Security numbers and employment history. These reports also include a credit history summary such as the number and type of accounts that are past due or in good standing, and detailed account information related to high balances, credit limits, and the dates accounts were opened. Credit reports list credit inquiries and details of accounts turned over to collection agencies from public sources such as information about liens and wage garnishments. Generally, credit reports retain negative information for seven years, while bankruptcy filings typically stay on credit reports for either 7 or 10 years, depending on the type of bankruptcy.

The Fair Credit Reporting Act requires each of the three credit reporting bureaus to supply consumers with a free credit report once per year. Federal law also entitles consumers to receive free credit reports if any company has taken adverse action against them. This includes denial of credit, insurance or employment as well as reports from collection agencies or judgments, but consumers must request the report within 60 days from the date the adverse action occurred. In addition, consumers who are on welfare, people who are unemployed and plan to look for a job within 60 days, and victims of identity theft are also entitled to a free credit report from each of the reporting agencies.

Credit reports typically divide information into four sections. The top of the report contains personal information about the consumer, and in many cases, this section may include variances of the consumer's name or Social Security number, simply because the information was reported incorrectly by a lender or other entity.

The second section comprises the bulk of most reports and includes detailed information on lines of credit, also called trade lines. The third section includes public records such as bankruptcies, judgments and tax liens. The bottom of the report lists all of the entities that have recently inquired to see the individual's credit report.