What is a 'Credit Report'

A credit report is a detailed report of an individual's credit history. Credit bureaus collect information and create credit reports based on that information, and lenders use the reports along with other details to determine loan applicants' credit worthiness. In the United States, there are three major credit reporting bureaus: Equifax, Experian and TransUnion. Each of these reporting companies 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.

BREAKING DOWN 'Credit Report'

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 date accounts were opened. Credit reports list credit inquiries and details of accounts turned over to credit agencies 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 about 10 years.

Accessing Credit Reports

If an individual submits an application for credit, an insurance policy or rental property, creditors, insurers, landlords and select others are legally allowed to access his credit report. Employers may also request a copy of an individual's credit report as long as the individual agrees and grants permission in writing. These entities typically must pay the credit bureaus for the report, which is how credit bureaus earn money.

Free Credit Reports

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.

Reading Credit Reports

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.

RELATED TERMS
  1. Credit Bureau

    An agency that collects individual credit card information and ...
  2. Credit Rating

    An assessment of the creditworthiness of a borrower in general ...
  3. Negative Information

    Data in a consumer’s credit report that lowers his or her credit ...
  4. Credit History

    A record of a consumer's ability to repay debts and demonstrated ...
  5. Credit Reporting Agency

    This term refers to businesses that maintain historical information ...
  6. Consumer Credit File

    A collection of data about an individual’s borrowing and repayment ...
Related Articles
  1. Managing Wealth

    Business Vs. Consumer Credit Reports: What's the Difference?

    Find out the difference between a business credit report and a personal credit report, and why it should matter for business owners.
  2. Personal Finance

    Check Your Credit Report

    Make sure there are no errors holding you back from obtaining a loan.
  3. Personal Finance

    Spotting Credit-Repair Scams

    Credit repair scams are common in today's debt-reliant world. Don't be a victim!
  4. Personal Finance

    Which Is More Important: Credit Report or Credit Score?

    Here's the difference between a credit report and credit score, and which is more important.
  5. Personal Finance

    Fixing Your Credit Score: A Do It Yourself Guide

    Following these five steps can go a long way toward repairing a low score.
  6. Personal Finance

    There's Help Coming For Your Credit Report

    Soon, there will be another body protecting consumers when it comes to credit scores. Here are some new things to know about getting a credit report in the future.
  7. Personal Finance

    The Importance Of Your Credit Rating

    A great starting point for learning what a credit score is, how it is calculated and why it is so important.
  8. Personal Finance

    Monitoring Your Credit? Keep These 5 Things in Mind

    Your credit history is a key financial diary of your life. Here are five things to consider when making sure your credit is healthy.
  9. Personal Finance

    How To Dispute Errors On Your Credit Report

    It just takes some time and effort to rebound from a nasty case of "credit rejection shock."
  10. Personal Finance

    Credit Score vs. Credit Report: Which Is Better?

    They sound alike, but can serve very different ends.
RELATED FAQS
  1. What's the difference between a credit rating agency and a credit bureau?

    Learn how to differentiate between credit rating agencies and credit bureaus, two industries that distribute valuable risk ... Read Answer >>
  2. What's the difference between a credit bureau and a credit rating agency?

    Learn the differences between credit bureaus that report on individuals' creditworthiness and credit rating agencies that ... Read Answer >>
  3. Why are there three national credit bureaus?

    Discover why "big three" credit bureaus Experian, TransUnion and Equifax dominate the credit reporting market and how they ... Read Answer >>
  4. What is the difference between bad credit and no credit?

    The answer to this question will depend on what information (if any) is found on your credit report, such as any bankruptcy ... Read Answer >>
  5. What's the difference between credit score and credit history?

    Check out the differences between credit score and credit history, and learn how your credit history is used to create your ... Read Answer >>
  6. How accurate are free credit reports?

    Discover if a free credit report is accurate, how to access it through a major credit reporting agency, and what to do if ... Read Answer >>
Trading Center