Understanding a Credit Report

A wealth of information regarding your financial history as it relates to credit is summarized into a credit report.  Lenders and creditors use a credit report to determine your credit worthiness.  There are few key sections included in each credit report which include identifying personal information, credit history, public records, inquiries, and dispute statements. 

The following identifying personal information is contained within your personal credit report: name, current address, telephone number, social security number, and current employer.  It is possible for a spouse’s name to be included on a credit report.  However, it will not include your income, previous addresses or employers, driving or criminal record, religious affiliation, checking or saving account balance, health status, racial group or color or national origin. 

The majority of your personal credit report is comprised of the credit history that you have established over time.  Any account that you have ever held is included in section, including but not limited to mortgages, credit cards, loans, or any other form of credit that has been issued to you by any lender for any reason.  When your account is reported to the credit agency, the lender includes information such as the monthly payment, the month and year the account was established, form of credit, maximum credit line, current balance, and whether or not you have paid every payment on time.      

Any public records that relate to credit worthiness are also reported.  These can include, but are not limited to, court orders and judgments, tax liens, and bankruptcies. 

Inquiries into your credit are also listed on your report.  Anytime your credit report is requested, it is recorded as an inquiry on that part of your credit record.  However, there is a distinction made between different types of inquiries.  Different versions of your report are provided based on the type of inquiry and purpose.  When a lender initiates the request because you are applying for credit, then the inquiry is considered to be obtained within permissible purpose.  A business version is then provided and only lists other inquiries that were made within permissible purpose.  There are also companies that request your information for the purpose of pre-approved offers, but are listed in the inquiry under that purpose.  Yet, when you request it, then you are provided with a consumer version that contains all information reported, including all of the inquiries.     

It is wise to view your credit history yearly to ensure that all the information is accurate.  It is possible that some mistakes are made when companies report your information, which you should then promptly dispute.  Anytime you do dispute inaccurate information, it is included as a dispute statement within your credit report.