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Credit Report — Fast Facts

If you're like many consumers, you have questions about what goes into your credit report and who uses it. Here is an overview that address many of your questions and concerns.

What is a credit report? A credit report is a summary of your financial reliability for the most part, your history of paying debts and other bills. It is prepared by credit bureaus (also known as credit reporting agencies) primarily for use by lenders, employers and others who, under the federal Fair Credit Reporting Act (FCRA), have a legitimate need for the information, such as when you apply for a loan, insurance policy, apartment or job.

What's in my credit report?
In general, your credit report has four components:

• Identifying information, such as your name, Social Security number, current and previous addresses, telephone number, birth date, and employer.
• Public record information, generally gathered from local courthouses, including bankruptcy records, foreclosures, tax liens, court-ordered payments, and late child-support payments. It is used to determine if you have previous defaults or legal judgments against you. Derogatory information can generally remain on your credit report for up to seven years; bankruptcy information for 10 years.
• Other credit history information, such as a list of your credit cards and loans, and whether payments were on time.
• Inquiries, a section of your report that lists the creditors, insurance companies or other parties that have requested your credit report, usually when considering an application you submitted. Inquiries can remain on your credit report for two years.
• How Credit Is Scored - pdf | Download Adobe Reader

Source: Freddie Mac

Can anyone get my credit report?
The Fair Credit Reporting Act (FCRA) contains rules about who can get your credit report. Generally, a third party can access your credit report when considering an application you've made, such as for a loan, a job, insurance or an apartment. The law also allows entities to access your report as part of an ongoing business relationship.

Can I get a copy?
Because the credit bureaus can have different information and findings, many experts advise you to obtain your report from each of the three major credit bureaus. Most likely, each of the three major credit bureaus that operate nationwide Equifax, Experian and TransUnion has a credit report on you.
To get copies of your reports, contact the credit bureaus listed above. Costs can vary, but under the latest Federal Trade Commission (FTC) rules the most you can be charged is $9. And in certain situations, your credit report is free.

• Major credit bureaus

How often should I get my credit report?
Many financial advisors suggest that you review your credit report for inaccuracies or omissions about once a year. It's especially important to review your credit report before making a major purchase, such as a home or a car, so you can correct an error before it slows down your credit approval or prevents you from getting the best possible loan terms.

What problems can I expect?
While federal law requires lenders and other companies providing information to credit bureaus to give accurate information, mistakes do happen. So, when you look at your report:

• Make sure it accurately reflects how you have paid your bills.
• Verify that all the accounts listed are yours, especially if you have a common name or you share a name with a relative. You also want to be careful that an identity thief hasn't opened new accounts in your name to commit financial fraud.
• Look for accounts you don't use and may have forgotten. You may be able to raise your credit score by closing unnecessary credit card accounts.

Can I correct my credit report?
The FCRA gives you the right to dispute inaccuracies or omissions, and it requires credit bureaus to investigate your complaint (generally within 30 days), send you a prompt response and correct any errors. The law also requires the source of inaccurate information (such as a bank) to correct the record at the credit bureaus to which it initially provided the erroneous information.
The Federal Trade Commission suggests:

• Immediately tell the credit bureau, in writing, about information you believe is incomplete or inaccurate. Include copies, NOT originals, of any documents that support your position.
• Clearly identify each item in your credit report that you dispute, state the facts and request a correction.
• Send your letter by certified mail and request a return receipt to document that your complaint arrived at the credit bureau.
• Keep copies of your dispute letter and enclosures.
• Also contact the company that provided the inaccurate or incomplete information to the credit bureau and request a correction of its records, too.
• If a credit bureau's investigation does not resolve your concerns, the FCRA allows you to submit a brief statement about the matter.
• Sample Dispute Letter

What if I have a complaint?
First, try to resolve the matter with the credit bureau directly. If you're not satisfied, contact the Federal Trade Commission. The FTC does not resolve individual disputes, but it does provide useful information that may help consumers resolve their problems.

What is a credit score?
A credit score is a number calculated by a credit bureau, a lender or another company intended for use in making a decision on a loan application or other product or service.Think of credit scoring as a point system based on your credit history, designed to help predict how likely you are to repay a loan or make payments on time. Everyone with a credit record also has a credit score. In general, the better your credit score the better your chances are of getting a loan with an attractive interest rate.

What determines my credit score?
Typically, your credit score is most influenced by two factors: how you pay your debts and how much debt you owe. For example, late payments on loans, a past bankruptcy, debt collections or a court judgment ordering you to pay money as a result of a lawsuit will negatively affect your credit score.

Can I get my credit scores?
Your scores, along with an explanation of how the score was derived, typically are available online for a small fee. You may want to call or check the Web sites of any of the three major credit bureaus. Remember, your score may vary from one company to another.

Source: Federal Deposit Insurance Corporation