One of the first things you need to do to control your finances is to get a copy of your credit report and make sure all your information is correct. Your credit report contains everything in your credit history - like past and current debt, payment history for each debt, and personal information.
The information on your credit report follows you wherever you do business - it details how well you manage your credit and whether you're the type of consumer who pays bills on time. Your credit score will be determined by your credit report's details, so good management of your credit score starts with your credit report.
What is a credit report?
A credit report contains a detailed list of your credit history as it is reported by your lenders to a credit reporting bureau. The information in the credit and payment history portion of your report is used to make up your credit score.
Lenders report changes to your account history on their own schedule, but you can expect items on your report to get updated every 30-90 days.
Why is it important?
Banks, lenders, landlords, utility companies, insurance companies, and some employers will use your credit report information (combined with your credit score) to determine your creditworthiness and ability to manage and pay bills on time.
What information is on my credit report?
Unlike your three-digit credit score, your credit report is a comprehensive snapshot of your credit history and personal information. For example, every company that has ever loaned money to you will be listed on your report, along with if you've ever made a late payment.
Your credit report information is listed in detail:
- Your personal information: Full name, date of birth, social security number, aliases, past and current addresses, and past and current employers.
- A list of all credit accounts: Including the creditor's name, address, phone number, when the account was opened/closed, your credit limit and current balance, and whether you've made a late payment or defaulted on the account.
- Public records: Bankruptcies, charge-offs, collection accounts, liens, foreclosures, repossessions, civil suits, or judgments.
- Credit inquiries: All soft and hard inquiries and the companies that have accessed your credit report within the past two years.
What are the major credit reporting bureaus?
Three major credit bureaus maintain a copy of your credit report. When you apply for services or credit with a business, information from one, or a combination of all three bureaus, will be used to review your credit history:
The three major credit reporting agencies are:
Each agency collects and maintains its own records of your credit information as it is reported by lenders. Because of this, the information in each report may differ slightly.
Why is it important?
You don't have a lot of control over the details lenders send to the credit reporting bureaus, but you are offered the chance to see what's in your report and request that any errors be fixed.
It's important to know what's on your credit report because reporting errors are common. Errors can have a significant impact on your credit score and your ability to obtain more credit, find rent, insurance, or even a new job.
Credit reporting errors can range from something simple like the wrong address or spelling of your name to something major like a credit account you never opened, incorrectly reported late payments, or a credit account that's missing from your report.
Knowing what's in your report, and monitoring it consistently, can alert you to fraud and identity theft.
How to get a copy of your credit report
Typically, you're able to get a free copy of your credit report from each of the three major credit bureaus once a year. AnnualCreditReport.com is the easiest way to get a copy.
You can also visit the individual credit reporting bureau's website to request a copy of your report.
Registering for an account with the individual bureaus will allow you to manage fraud alerts, add/remove credit freezes, and submit requests to fix errors.
There are also free third-party apps like Credit Karma® and Credit Sesame® that can help you monitor your credit report and score for free.
How to fix errors on your credit report?
If you find an error on your credit report, contact the credit reporting bureau directly through their website or by writing a letter (information on how to request an error fix, and the mailing address will be on each bureau's website). You may need to send supporting documentation proving the information is in error.
The information on your credit report is used by numerous companies to decide on whether they should extend services to you. Your credit report and score will follow you wherever you go so make sure you know the information being reported on you is correct.