Your credit reports are a record of your financial history, featuring important information about your credit cards and loans.
This information is used to calculate your credit score: positive information, showing responsible behavior, will improve your credit score. Negative information, like late payments and collection accounts, indicate irresponsible behavior and will lower your credit score.
There are three credit bureaus (also known as credit reporting agencies) that produce credit reports: Equifax, Experian, and TransUnion.
You have a separate credit report from each of these companies, but for the most part the information in each report will be the same. However, in some cases you might notice some differences because not all lenders report to the same credit bureaus.
The layout of these reports is slightly different depending on the source, but if you’re exploring any of your credit reports you can focus in on the following four key parts.
Sections in Your Credit Report
Personal Identification Information
First, take a close look at your identifying information to make sure everything is correct – the spelling of your name, your current address and phone number, your Social Security number, birth date, and current employer.
One small mistake in any of that information can lead to headaches and declined credit down the road. If something is wrong, take steps to fix it right away by contacting the credit reporting agency that issued the report.
Accounts – Credit History
Next up is a list of your current accounts and detailed information about each one. This section will include all accounts you currently have with banks, credit card companies, retailers, and any other lenders, as well as accounts you have closed in recent years.
Each account is identified by the type of loan involved – a credit card, a home mortgage, a student loan, an installment loan, etc. Revolving accounts refer to credit cards and some other types, which have interest rates and terms that are subject to change. Installment loans have terms that are fixed at the outset and do not change.
In addition, you will see the date you opened the account, the amount of the loan or the credit limit on the account, and, most important, your payment history over the past two years. If you have been late with or skipped a payment, that will show up on your report.
Even if you closed an account or paid off a loan, those accounts remain on your credit report for a period of time. Each account has a “status” box that shows whether the account is open or closed, and either the current payment status or the payment status when the account was closed.
- “Closed/current” or simply “closed” means that the account is closed and that the payments were current
- “Closed/was XX days delinquent” means the account is closed and was delinquent by a certain number of days
- “Closed/never late” indicates that you closed the account and never made a late payment
- “Paid” indicates that you paid off that account, usually a loan.
- “Charged off” indicates that the debt on the account was delinquent and never paid in full.
Negative credit information, including delinquent and charged off loans or accounts, can remain on your credit report for seven years. Your credit report will also indicate if any accounts have been turned over to a collection agency.
This portion of your report shows any public information available about your credit history, including tax liens, bankruptcy filings, wage garnishments, and monetary judgments.
Wage garnishment involves your employer taking money from your paycheck to settle unpaid debts, for example, for child support or delinquent student loans.
A monetary judgment is issued when a judge orders you to pay a certain amount following a lawsuit, and remains on your credit report for seven years or until the statute of limitations runs out, whichever is longer. Bankruptcies remain on your report for ten years.
This section of the report lists all lenders who received copies of your credit report over the past year as a result of credit inquiries.
This information includes the date of inquiry and the name of the company that made the request. This includes “hard” inquiries by lenders that are made when you apply for credit of some kind, and “soft” inquiries that are routine check ups by current creditors.
In general, a high number of hard inquiries in a 12-month period can negatively impact your credit score.
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:
- Your income, assets and other wealth metrics
- Your level of education
- Checking or savings accounts
- Debit cards or prepaid debit cards
- Your gender, national origin, race, religion or marital status
- Your medical history
- Your political affiliation
- Criminal records
You also won’t normally see utility accounts like cable television, internet, gas, water, or cell phone service. However, if you default or go delinquent on any of these types of payment obligations, they may end up on your credit report if the account is sent to collections and the collector reports it – which should be avoided if at all possible.
Why Isn’t My Credit Score on My Credit Report?
Thanks to the Fair Credit Reporting Act (hereafter “FCRA”), each of us are entitled to one free copy of our credit reports every 12-months from each of the three national credit reporting agencies: Equifax, Experian and TransUnion.
As part of the credit report ordering process, each of the three credit reporting agencies will offer you the option to add a credit score to your free annual credit report. However, if you opt to include a credit score, you’ll have to pay a fee. This is because credit scores are not actually a component of you credit reports, so it doesn’t have to be given to you for free.
The right to access your credit reports for free wasn’t actually granted until 2003, with the Fair and Accurate Credit Transactions Act – FACTA for short, which officially amended the FCRA to give us the rights as we know it today. Still, only about 4% of free credit reports are claimed every year.
Too Many Credit Scores
One of the main reasons why free credit scores have not yet been made an official part of the FCRA has to do with the number of credit scores on the market. In the past, the FICO score was the most well-known and widely used score, making it the one and only score that mattered to lenders. This is still true, but there’s a twist.
Other credit bureau risk scores, like the VantageScore credit score, and custom scoring models designed by the lenders themselves, have made for a crowded market where we all have dozens of scores rather than just a single one. There are over 50 different versions of the FICO credit score alone and three versions of the VantageScore credit score.
Even if your credit report included a credit score, it’s unlikely that it would be the same score a potential lender would use, which would lead to a huge mass of confusion for the consumer. And even if you were somehow given EVERY single one of your credit scores today, it’s very likely they’d be different in a few weeks as your credit reports are updated.
Credit Score Disclosure Rules under Dodd-Frank
Before you cry foul at the unfairness of it all, things are getting better for the consumer. Thanks to Dodd-Frank consumers are entitled to see their actual credit scores, but only when they’ve been denied because of that score.
Add that to the long-existing requirement to provide the consumer with a credit score disclosure notice when they apply for a mortgage loan, and the shift toward more score availability is continuing. It’s certainly not perfect but it’s getting better.
The free educational scores you find online offer a great way to get a general idea of where you stand, but it doesn’t guarantee that the score your lender will use will be the same – or anywhere close to the score you get for free (or even pay for). This is what makes the Dodd-Frank rule so valuable.
Again, if you apply for a loan and the lender uses your credit score as a determining factor in denying your loan, or offers you terms that are less than the best terms available, they must legally disclose the score they used along with your adverse action letter.