Credit Reports Explained

What a Credit Report Is

A credit report is a detailed record of a consumer's credit history. It is compiled by national credit reporting companies, which gather information from lenders, creditors, and public records. The report summarizes how accounts have been managed over time.

Credit reports are used by lenders, landlords, insurers, and sometimes employers to evaluate applications. The information in a report can affect decisions about credit, housing, and employment. Federal law, primarily the Fair Credit Reporting Act, sets rules for what can be included and how disputes are handled.

Information Typically Found on a Credit Report

Credit reports generally contain several categories of information. Personal identification details include name, address history, Social Security number, and date of birth. These help ensure the report belongs to the correct person.

The main body of the report lists credit accounts, such as credit cards, mortgages, auto loans, and student loans. For each account, the report shows the creditor, account type, balance, credit limit or original loan amount, payment history, and account status.

Public records may include bankruptcies, which can remain on a report for a number of years. Inquiries are records of when a company accessed the report, often because of an application for credit. Collection accounts appear when a debt has been transferred to a collection agency.

• Personal identification information
• Credit accounts and payment history
• Public records, such as bankruptcies
• Inquiries from lenders or other authorized parties
• Collection accounts

How to Read a Credit Report

Reading a credit report involves checking each section for accuracy. Start with personal information to confirm names and addresses are correct. Then review the account list to verify that each account belongs to you and that balances and payment histories are reported correctly.

Public records and inquiries should also be reviewed. Inquiries that you did not authorize may indicate identity theft or errors. The report may include a key or legend explaining abbreviations and codes used by the credit reporting company.

How to Obtain Your Credit Reports

Consumers in the United States can obtain free credit reports from each of the national credit reporting companies through AnnualCreditReport.com. This is the only federally authorized source for free reports. Reports can also be requested by mail or phone.

Federal law allows for additional free reports in certain situations, such as after a fraud alert or if a consumer is denied credit based on report information. Some companies offer paid credit monitoring or report access, but the free reports are sufficient for reviewing accuracy.

• Online at AnnualCreditReport.com
• By phone through the Annual Credit Report request service
• By mail using the Annual Credit Report request form

The National Credit Reporting Companies

Three national credit reporting companies operate in the United States: Equifax, Experian, and TransUnion. They are separate, for-profit companies that compile and sell credit information. Each may have different information about a consumer because creditors may report to one, two, or all three.

CreditInformation.org is an independent publisher and is not affiliated with any credit reporting company. The reports from each company can vary, so reviewing all three is part of understanding your credit history.

Errors and Inaccurate Information

Errors on credit reports can occur for many reasons. Common issues include accounts that belong to another person with a similar name, incorrect payment status, duplicate accounts, or outdated information. These errors can affect credit decisions.

Consumers have the right to dispute inaccurate or incomplete information. The credit reporting company must investigate disputes, usually within 30 days. If information is found to be inaccurate, it must be corrected or removed.

Disputing Information on a Credit Report

To dispute information, a consumer can file a dispute with the credit reporting company and, in some cases, directly with the creditor. The dispute should include an explanation of the error and copies of supporting documents. The credit reporting company will forward the dispute to the creditor if necessary.

Under the Fair Credit Reporting Act, credit reporting companies must conduct a reasonable investigation. They must notify the consumer of the results and provide a free copy of the revised report if changes are made. If the dispute is not resolved, consumers may add a statement of dispute to their report.

The dispute process is a legal right, not a service that requires a third party. Consumers can file disputes themselves without paying a third party. The Consumer Financial Protection Bureau provides additional information and accepts complaints about credit reporting issues.