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Credit Reports Explained: What’s a Credit Report, and How Do You Read One?17 min read
Your credit reports outline your financial history, particularly with respect to how you’ve managed credit. Credit reports generally include credit account information, personal information, bankruptcies, and more, while excluding things like your credit scores and checking/savings account information.
What Is a Credit Report?
Your credit reports are records of your financial history, featuring important information about how you manage your credit cards, loans, and other financial obligations.
This information is used to calculate your credit scores. Positive information, showing responsible behavior, can improve your credit scores. Negative information, like late payments and collection accounts, indicates irresponsible behavior and can lower your credit scores.
But what exactly is included in credit reports? How much can lenders learn about you when they pull your credit files?
It’s important to keep an eye on the health of your credit, and that means having some idea of the contents of your credit reports. Keep reading to learn what to look for.
What’s In Your Credit Report?
There are three major credit bureaus (also known as credit reporting agencies) that produce and sell credit reports: Equifax, Experian, and TransUnion.
You have a separate credit report from each of these companies, giving you three different credit reports in all. For the most part, the information in each report will be similar. But you might notice some differences because not all lenders report to the same credit bureaus.
Your personal and financial information will be laid out differently in each of your three reports — there is no uniform formatting for credit reports. But they’ll each contain the same general types of information about you and your credit history.
The following types of information will be included in your credit reports:
- Personal Identification Information
- Credit Accounts (aka Tradelines) and Collections
- Credit Inquiries
- Consumer Statements/Alerts/Disputes
In addition to the list above, you’ll also see a description of your rights as a consumer and contact information for the credit bureau.
Credit reports aren’t always easy to read. Yet if you take some time to browse and study each section, you should be able to get a good understanding of your credit profile.
Example Credit Reports
Before jumping into your own credit reports, you may find it useful to browse some simple examples. Follow the links below to get an idea of how your credit reports might look, although your reports may have updated layouts.
Let’s go over the main features of credit reports. You can follow along in any of the example reports above if you’d like (the TransUnion report might be the clearest example).
Personal Identification Information
This section includes all the information needed to associate your identity with your credit. It may include:
- Date of birth
- Social Security number
- Current and previous addresses and phone numbers
- Current and previous employers
- Other identifying information
Take a close look at your data to make sure everything is correct. Check the spelling, and make sure all numbers are accurate.
One small mistake in any of that information could lead to headaches and possibly even declined credit down the road. If something is wrong, take steps to fix it right away by contacting the credit reporting agency that created the report. In most cases it shouldn’t be too much of a hassle to correct this kind of information.
Did you find an error in your credit reports? If you find a mistake in your personal information or in any of the following sections, you should file a dispute with the appropriate credit bureau as soon as possible.
Credit Accounts and Collections
Your report also contains a list of your credit accounts with some details about each one. This section will include all accounts you currently have open with banks, credit card companies, and any other lenders, as well as accounts you have closed in recent years (as long as the lenders reported those accounts to the bureau).
Your accounts may be organized according to status. Open accounts and closed accounts may be grouped separately. Additionally, accounts in positive standing may be grouped separately from accounts in negative standing.
Each credit account is identified by the type of loan: credit card, home mortgage, student loan, auto loan, etc. Revolving accounts are credit cards and some other types, which allow you to borrow funds and pay them back over and over again. Installment loans are a different type of financing in which you borrow money a single time, and then usually make a fixed monthly payment over a fixed period of time until it’s paid back (like a student loan).
You’ll see the name of the lender or creditor, and the date you opened the account. You may also see details like:
- An ID number for the account
- The amount of the loan or the credit limit on the account
- The highest account balance (for credit cards)
- Your responsibility for the account (individual, cosigner, etc.)
- Your payment history over the past two years or more
- Additional notes and remarks
Each account also has a “Status” field that shows whether the account is open or closed, and the current payment status or the status when the account was closed. Even if you closed an account or paid off a loan, those accounts remain on your credit reports for a period of time (usually up to seven years for negative accounts and ten years for positive ones).
- “Open/never late” means the account is currently open and payments have always been current.
- “Closed/current” means the account is closed and the payments were current.
- “Closed/never late” also indicates that the account is closed and you never made a late payment.
- “Closed/was XX days delinquent” means the account is closed and was delinquent by a certain number of days.
- “Charged off” indicates that the debt on the account was delinquent and the lender charged it off for tax purposes. However, you may still owe the debt.
- “Paid” indicates that you paid off that account, usually a loan.
Negative credit information, including delinquent and charged-off loans or accounts, can remain on your credit reports for up to seven years. Your credit reports will also indicate if any accounts have been turned over to collection agencies. Collection accounts might be grouped together.
You may see a payment legend explaining the ratings and codes used to designate accounts as current, late, charged-off, etc. Here’s an example from TransUnion:
If you’ve been late or skipped a payment, that information can show up on your reports, potentially as a red warning box like above — almost literally a red flag.
Here’s an example of an account you might find on a credit report, in this case again from TransUnion:
Trying to get rid of a collection account that doesn’t belong on your credit reports? Learn how to Remove an Incorrect Collection Account.
This portion of your reports shows certain negative public records available about you and your credit history. You may not see this section on your report if you don’t have any negative public information.
In the past, this section included bankruptcy filings, tax liens, and judgments of various kinds, but some recent credit bureau policy changes have removed tax liens and judgments from credit reports for the present time. But this is just a policy, not a law, and it’s possible they could be included in reports again in the future.
By law, different types of negative items can stay on your reports for different lengths of time:
- Chapter 13 bankruptcy: Can remain for seven years after being discharged, but the total amount of time is capped at ten years.
- Chapter 7 bankruptcy: Can remain for up to ten years from the filing date.
- Judgment: Can remain for up to seven years from the filing date.
- Tax lien: Can remain for up to seven years after the lien is paid and released; unpaid tax liens never have to be removed.
You can read more about negative information on your credit reports below.
Do you have any incorrect negative information on your reports, bringing your credit scores down? Learn how to correct errors and mistakes in your credit reports. And look into the matter closely, because this could be a sign of identity theft.
When a lender wants to check your credit it performs a credit inquiry. This section of the credit report lists all the credit inquiries that were made in the last two years, at that specific credit bureau.
The inquiry section shows you all the lenders and creditors that received copies of your credit report from that bureau — if you’re looking at an Equifax report, it’s showing you all the lenders that looked at your Equifax report.
Credit inquiries can be made:
- When you apply for credit cards, loans, and mortgages, or request higher credit limits
- When lenders look to pre-approve you for credit
- When current creditors perform routine check-ups on your credit
- When you apply for a job, an apartment, or a cell phone plan
Some of these credit checks will result in a hard inquiry (which could negatively affect your scores slightly), while others will result in soft inquiries (which have no effect on your scores). Hard inquiries are visible to anyone who performs a hard inquiry of their own on your credit; soft inquiries are visible only to you.
The inquiries on your reports will probably be broken up into two sections — one for hard inquiries and one for soft. Each inquiry will include the date it was made and the name of the company that made it. They may also include other information, like how long each inquiry will remain on your report or the reason for the request (such as credit application or tenant screening).
Credit bureaus may refer to hard inquiries as “regular inquiries,” “inquiries shared with others,” or “inquiries that may impact your credit rating.” And they may refer to soft inquiries as “promotional inquiries,” “account review inquiries,” or “inquiries shared only with you.”
Credit inquiries will remain on your credit reports for up to two years, but they typically only have the potential to affect your FICO credit scores for 12 months.
A high number of hard inquiries in a 12-month period can negatively impact your credit scores. But they have a relatively minor negative impact which doesn’t last too long. In general, the fear of hard inquiries shouldn’t stop you from applying for credit cards or other financing — as long as you actually have good reasons to apply, that is.
This section (which could be broken up into multiple parts) includes any consumer statements, fraud alerts, or credit report disputes you’ve made. You may not see any of these sections if you don’t have any of the relevant information on your reports.
Consumer statements are brief explanations you can give regarding either your credit report on the whole or individual accounts. They may be made after an unsuccessful dispute of an account, for example. But consumer statements are of limited value, and we discuss them more below.
Fraud alerts are a free security measure to help protect your credit. There are three types of alerts:
- Initial fraud alerts
- Extended fraud alerts
- Active duty fraud alerts
All fraud alerts require lenders to confirm your identity before opening any new credit accounts associated with your Social Security number. You can learn all about how to place fraud alerts here.
Finally, if you’ve filed a dispute with the credit bureau you may also see those details here. If you ever find any incorrect or fraudulent information on your credit reports you should file a dispute with the relevant bureaus as soon as possible.
Credit Report Codes and Definitions
You may see a variety of codes and abbreviations associated with your credit accounts and the other information on your reports. Each credit bureau has its own unique codes, but they also share certain coding systems (like the Equal Credit Opportunity Act Codes below).
These codes probably won’t be too relevant for the average person. But in some cases you may want to investigate how a certain account is labeled, because that can determine how it’s treated and how it affects your credit scores.
There are far too many codes to list and explain here. The links below include some codes from each of the three credit bureaus, and following them you’ll find some example coding systems from Equifax.
Equifax Credit Report Codes
|Equifax Trade Check Rating Codes|
|Installment Account||Revolving or Option Account||Open Account
(30, 60, or 90-day account)
|I0||R0||O0||Too new to rate|
|I1||R1||O1||Pays account as agreed|
|I2||R2||O2||Not more than two payments past due|
|I3||R3||O3||Not more than three payments past due|
|I4||R4||O4||Not more than four payments past due|
|I5||R5||O5||More than 120 days or four payments past due|
|I7||R7||O7||Making regular payments under WEP|
|I9||R9||O9||Bad debt; placed for collection|
|IA||RA||OA||Account is inactive|
|IB||RB||OB||Lost or stolen card|
|IC||RC||OC||Contact member for status|
|ID||RD||OD||Refinanced or renewed|
|IF||RF||OF||In financial counseling|
|IG||RG||OG||Foreclosure process started|
|IH||RH||OH||In WEP of other party|
|IM||RM||OM||Included in Chapter 13|
|Equal Credit Opportunity Act Codes|
|A||Authorized User: This individual is an authorized user of this account; another individual has contractual responsibility.|
|C||Joint Account Contractual Responsibility: This individual is contractually obligated to repay all debts arising on this account. There are other people associated with this account who may or may not have contractual responsibility.|
|I||Individual: This individual has contractual responsibility for this account and is primarily responsible for its payment.|
|M||Maker (signer): This individual is responsible for this account, which is guaranteed by a Co-maker (cosigner).|
|P||Shared Account: This individual participates in this account. The association cannot be distinguished between ECOA I or J.|
|S||Cosigner: This individual has guaranteed this account and assumes responsibility should signer default.|
|T||Terminated: Account is terminated.|
|U||Undesignated: This is reported by the Bureau only.|
|X||Deceased: The subject is on record as being dead.|
|Credit Inquiry Codes|
|AM or AR||Periodic review by a current creditor|
|PR||Creditor reviewed account as part of a portfolio it’s purchasing|
|Equifax or EFX||Equifax’s activity in response to a personal request from the consumer|
|ND||General inquiries that do not display to credit grantors|
|ND MR||Reissue of a mortgage credit file to another company|
|Public Record Codes|
|AB JD||Abstract Judgment (foreclosure, etc.)|
|FN ST||Financial statement filed|
|MAR||Marital items (divorce, etc.)|
||Paid collection ($50 and up)|
||Satisfied judgment (foreclosure, etc.)|
||Unpaid collection ($50 and up)|
||Wage earner plan|
Where Does Credit Report Information Come From?
Most credit report information comes from a variety of financial institutions and lenders, known as data furnishers.
When you form a relationship with a credit card issuer or loan provider, that information may be reported to the three major credit reporting agencies: Equifax, Experian, and TransUnion.
Some types of activity or accounts are considered positive, meaning they might improve your credit and cause your credit scores to go up (like responsible credit card use). Other activity and accounts are negative and might harm your credit, which can cause your credit scores to go down (like late payments and collection accounts).
Different types of accounts will remain on your credit reports for different lengths of time, having either positive or negative effects.
Credit reporting is completely voluntary; there is no law that says companies have to report account information to the credit bureaus. But, if anything is included in your credit reports, the Fair Credit Reporting Act (FCRA) requires that information to be accurate. Errors in your credit reports can lead to lower scores and worse outcomes when applying for credit, so it’s important to monitor your reports to identify any harmful items and take steps to remove them as soon as possible.
Negative Information on Your Credit Reports
In many cases, severe financial setbacks are the primary causes for credit-damaging delinquencies like late payments, collections, charge-offs, or worse.
Recovering from these financial setbacks and the credit damage they leave behind can feel overwhelming. The silver lining, however, is that just because you have bad credit or bad credit scores, it’s not a life-long sentence — bad credit doesn’t have to haunt you forever.
As the information in your credit reports changes, your credit scores will reflect those changes. In fact, the older negative information gets, the less impact it will have on your credit scores. This is because credit scores place more emphasis on your credit patterns over the last 12 to 24 months.
It may sound counterintuitive, but the key to recovering from credit-damaging problems is typically to jump right back into the mix and begin adding new, positive information to your credit reports. Change won’t happen overnight, but as you continue to manage your new accounts well, those positive payment and credit management habits should gradually improve your credit over time.
Most negative information will stay on your credit reports for seven years, but there are some exceptions.
As mentioned above, judgments and tax liens are currently not included on credit reports as per credit bureau policy. (This is good for consumers.) But this is just the current policy, and the law doesn’t prevent them from being included again in the future. So we’ve included judgments and tax liens in the list below.
- Negative credit accounts may remain on your credit reports for up to seven years from the date of default (aka terminal delinquency) on an account. Another way to look at it: Negative accounts may stay on your credit reports up to seven years and six months (180 days) from the first missed payment that lead to default.
- Positive credit accounts, on the other hand, stay on your credit reports for as long as the account remains open and active.
- Closed accounts in positive standing usually remain for ten years from the date the account was closed (but that’s not based in law, it’s a credit bureau policy).
- A collection account can remain on your credit reports for up to seven years from the date the account went into serious delinquent status, typically the date of the first 180-day late payment (assuming you never caught the payments back up).
- The FCRA does not allow collection agencies to “re-age” collection accounts when they are purchased from the original creditor in an attempt to keep a negative account on credit reports longer. If a collection agency tries to re-age an account by manipulating the FCRA compliance date, that is illegal.
- If a collection agency tries to re-age your account in this way, you should dispute the account with the relevant credit bureaus; if that doesn’t work, contact an FCRA attorney.
There’s usually no difference between paid and unpaid collection accounts when it comes to credit scores used by lenders. Paying a collection account does not remove it from your credit reports, although some collection agencies may agree to stop reporting the account to credit bureaus in exchange for payment.
- Accounts with a charge-off status should be purged from your credit reports seven years from the date they became 180 days past due.
- Chapter 7 bankruptcies can remain for up to ten years from the date filed.
- Chapter 13 bankruptcies can remain for up to seven years from the date discharged, or a maximum of ten years.
- Judgments are not currently shown on credit reports from the three major consumer credit bureaus, and they have no effect on credit scores.
- Tax liens are not currently shown on credit reports from the three major consumer credit bureaus, and they have no effect on credit scores.
- Most credit inquiries are required by law to remain on your credit reports for two years. As far as your FICO Scores are concerned, however, only inquiries within the last 12 months are typically considered.
- Repossessions should be removed from your credit reports no later than seven years from the date your auto loan went into default (or seven and a half years from the date of first delinquency on your auto loan that lead to the default).
New York State Residents
- Satisfied judgments can remain on credit reports for up to five years from the date filed.
- Paid collection accounts can remain for up to five years from the date of last activity.
California State Residents
- Paid and released tax liens can remain on your credit reports for up to seven years from the date released.
- Unpaid tax liens can remain for up to ten years from the date filed.
What’s Not in Your Credit Report?
Believe it or not, there’s a lot that’s NOT included in your credit report, including information about:
- Checking and savings accounts
- Debit cards and prepaid debit cards
- Your income, assets and other wealth metrics
- Your level of education
- Your gender, national origin, race, religion or marital status
- Your medical history
- Your political affiliation
- Criminal records
There are many accounts you might not see on credit reports, like cell phone plans and utility accounts: cable television, internet, gas, and water. However, if you default or go delinquent on any of these payment obligations, they may end up on your credit reports if the account is sent to collections and the collector reports it — which should be avoided if at all possible.
Experian now offers a service called Experian Boost, which lets consumers opt in to add certain utility accounts and cell phone plans to Experian credit reports. This could help improve the credit scores of people with thin credit files, who don’t have much information on their reports. But the service requires you to link a bank account to verify positive payment histories, so whether you’re a fan of the service likely depends upon your feelings about giving Experian more of your data.
Why Aren’t My Credit Scores on My Credit Reports?
Thanks to the Fair Credit Reporting Act (FCRA), we’re entitled to one free copy of each of our credit reports every 12 months from the three national credit reporting agencies: Equifax, Experian and TransUnion.
But credit scores aren’t a part of credit reports — they’re calculated separately, based on the information in those reports.
Since credit scores aren’t a component of credit reports, they aren’t required by law to be given for free (except as part of an adverse action notice — see below). There are also hundreds of different credit scoring models — so which should be the free score that everyone can see? (It may sound like an easy decision — a FICO Score, right? — but it’s not so simple.)
As part of the credit report ordering process, each of the three credit bureaus will offer you the option to add a credit score when requesting your free annual credit reports — for a fee.
The right to access your credit reports for free wasn’t granted until 2003, with the Fair and Accurate Credit Transactions Act — FACTA for short — which officially amended the FCRA to give us the rights we know today. Still, the New York Times reported in 2018 that only 36% of consumers were checking their credit reports. But that was better than in 2014, which saw only 29%.
Before you cry foul at the unfairness of it all, things are getting better for the consumer. Thanks to amendments to the FCRA from the Dodd-Frank Act, consumers are entitled to see certain credit scores for free, but only when they’ve been denied credit or received less attractive loan terms as a result of those scores. This is known as an adverse action notice.
If you apply for a loan or credit card and the lender uses one of your credit scores as a determining factor in denying you, or offers terms that are less than the best terms available (adverse approval), it must send you an adverse action letter. Legally, that letter must disclose the score that was used, along with the credit bureau it came from.
A 2019 Credit Card Insider survey revealed that 79% of Americans think credit scores are listed on credit reports. We’ve dispelled this misconception here, but you can learn more about the survey’s other surprising findings in our rundown of its results.
Why Isn’t My Credit Card on My Credit Reports?
If you’ve checked your credit reports and found that a credit card or other account is missing, it could either be an error or your lender may not report to the credit bureaus. With the major card issuers, if your card isn’t showing up on your reports it’s more likely an error than a reporting policy.
Every lender and creditor has its own reporting policies, but most include some sort of regularly scheduled automatic update that transmits your account information electronically to the credit agencies every 30 days.
Based on the individual lender’s policies, it may report to all three major credit reporting agencies, or it may only report to one or two. This is one reason why credit reports and credit scores can vary from bureau to bureau.
Smaller credit unions and financial institutions may not report to all three bureaus, but you won’t run into this problem when you’re dealing with major lenders and card issuers, like American Express, Chase, Citi, and others. If you’re not sure, you can simply call customer support and ask.
If your lender isn’t reporting an account, you can contact it directly to request that it begins doing so.
Legally, however, you can’t force your lender to report an account. Credit reporting is completely voluntary, although there’s legislation that governs information once it’s reported. Unfortunately, if the lender won’t honor your request, there’s really not much you can do other than find a different company to do business with.
Should I Add a Consumer Statement to My Credit Reports?
There are three basic types of consumer statements on credit reports:
- General consumer statements
- Account-specific statements of dispute
- Account-specific statements of excuse
General consumer statements apply to your entire credit report, and can remain on your report for two years. Account-specific statements apply to individual accounts, and remain on your credit report until the accounts they’re associated with are removed.
A general consumer statement could be used to explain a situation like identity theft, for example, which may have wide-ranging effects on multiple credit accounts.
Or, you may want to add an account-specific consumer statement to your reports in response to fraud, a problem with a lender, or a dispute that didn’t go your way.
Oftentimes, disputed accounts are verified as accurate by the lender or collection agency. If this happens but you still believe the account to be inaccurate, you do have some recourse — an account-specific consumer statement of dispute. There are also account-specific statements of excuse, which aren’t associated with formal disputes and are more like excuses for negative activity.
Heard of 609 dispute letters to verify debts? Find out if they’re the solution to remove negative items from your credit reports here.
The 100-Word Consumer Statement
Consumers who have unsuccessfully disputed an item on their credit report are still legally afforded the right under the FCRA to tell their side of the story, albeit in a very concise manner. The “Statement of Dispute,” as it’s named in the FCRA, is described as follows:
“If the reinvestigation does not resolve the dispute, the consumer may file a brief statement setting forth the nature of the dispute. The consumer reporting agency may limit such statements to not more than one hundred words if it provides the consumer with assistance in writing a clear summary of the dispute.”
When written, the 100-word statement will become a part of the consumer’s credit report and will appear whenever that report is pulled in the future. Residents of Maine get a 200-word limit, instead of 100.
Credit Score Impact
Statements of Dispute, unfortunately for the disgruntled consumer, do not have any impact on a consumer’s credit scores. Consumer statements are not one of the factors considered by FICO, VantageScore, or any other credit-scoring model.
Therefore, if a consumer has a 640 score due in part to a collection account with which he disagrees, the consumer statement isn’t going to help or hurt that score at all. There is no way for credit scoring models to read and quantify consumer statements.
Are Statements of Dispute a Good Idea?
It can be very appealing for a consumer to tell his side of the story, especially when he feels like he has been wronged by a creditor or collection agency. Unfortunately, a Statement of Dispute is unlikely to have any impact whatsoever on a future lender’s decisions on credit card and loan applications.
The right to add one of these consumer statements has been around for over 25 years, well before automated credit scoring and underwriting systems. The idea behind the consumer statement was to allow lenders to actually read them while considering your application. Today it’s rare that a lender will actually print and read through your credit reports, so the value of the consumer statement just isn’t there any longer.
Credit granting decisions are largely automatic, based on a consumer’s credit scores, the factual data in credit reports, and the information provided in the application. If a consumer’s credit scores are too low to meet a lender’s minimum score criteria, or there are elements in the credit reports that raise red flags, that consumer’s credit application is likely going to be denied whether a consumer statement is present or not.
So it could just be a waste of time, but there are other, more practical reasons why you may not want to add certain consumer statements.
For example, if you add a general consumer statement explaining why you paid late on an old account, but that account then drops off your credit report, there will be no record of the late payment — except your consumer statement. This could alert lenders to the late payment if they happen to read through your credit report, and could affect their decisions. In this case you should remove your consumer statement when the account in question drops off your reports.
Now that you know what goes into credit reports, it’s time to check out your own. Learn how to access your free credit reports from AnnualCreditReport.com, and then monitor them over time to guard against errors and fraud.
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