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 Limit

    The amount of credit that a financial institution extends to ...
  3. Consumer Credit File

    A collection of data about an individual’s borrowing and repayment ...
  4. Thin File

    A limited credit history which can make it difficult to get credit ...
  5. Good Credit

    A qualification of an individual's credit history that indicates ...
  6. Credit Reporting Agency

    This term refers to businesses that maintain historical information ...
Related Articles
  1. Personal Finance

    6 Ways To Build Credit Without A Credit Card

    It's definitely possible – if a bit more complicated – to build a credit history without traditional credit cards. Just follow these steps.
  2. 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.
  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

    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.
  6. Personal Finance

    Take the Right Steps to Build Excellent Credit

    There are several things you can do to protect and improve your credit score.
  7. Personal Finance

    Is Your Credit Score at 850? It Can Be!

    Use these tips to increase your credit score and your ability to get low interest rates on loans.
  8. Personal Finance

    Build Your Credit Score

    Here are four good ways to build your credit score when you're starting from scratch. Do it right and you'll end up with excellent credit.
  9. Managing Wealth

    5 Common Misconceptions About Your Credit Report

    Your credit report is one of the most important factors in determining your ability to get loans and new credit and has a major influence on your rates.
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. How do credit bureaus make money?

    Take a closer look at how credit bureaus make money, and learn about the kind of services they provide to both lenders and ... Read Answer >>
  3. 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 >>
  4. Is your salary on your credit report?

    Your salary is not on your credit report, as of 2016. It has been at least 20 years since credit reports included salaries. Read Answer >>
Trading Center