Credit Reports 101

Credit is one of the most important features of your financial picture. It can impact loan decisions and pricing, and it can also be used to determine if you’ll qualify for things like a cell phone plan, renting an apartment, and obtaining insurance. Building and maintaining positive credit will save you money and give you peace of mind knowing you have the ability to access funds when you need them most. To do this, it’s important to understand what makes up your credit report. 

So, what is a credit report? A credit report is a detailed background of your credit history. It provides information about your identity, your borrowing habits, and your past and present loan obligations. Your ability for loan approval and the interest rate you will pay is partly determined by your credit report and credit score. 

There are three credit bureaus that collect and maintain your information - TransUnion, Experian, and Equifax. Each bureau independently manages its own records, and not all lenders report to all three bureaus (but most do). Even though there may be differences in what each bureau reports, all of your information with each bureau must be accurate. 

Your credit report includes several pieces of important information, such as:

1. Your personal identifying information, such as name, current and previous addresses, birthdate, social security number, and past and present employment information.
2. Your current and former credit accounts, such as credit cards, loans, mortgages, and student loans. Details on each one will include the lender name, the date the account was opened and closed, your credit limit or total loan amount, the current balance, and your repayment history.
3. Obligations that were not satisfied and sent to a collection agency, such as utility bills, medical expenses, or closed bank accounts.
4. Public records such as bankruptcy, civil lawsuits, and foreclosures.
5. Two years’ worth of credit inquiries.
6. Your credit score.

It’s important for you to regularly check your credit reports for accuracy, as well as watch out for any fraudulent activity that could harm your credit profile. If you find errors on your credit report, you will need to work with the credit bureau(s) directly to resolve them. 

You are allowed to request a free copy of your credit report from each of the three credit bureaus every year. While the free report will not provide you with your credit score, it will allow you to get an overview of your financial picture. Some people prefer to review all three reports at the same time, however, we recommend spacing out your reviews throughout the year so you can more easily monitor your credit for inaccuracies. Visit annualcreditreport.com to get your free credit report online.

As a component of Dutch Point Credit Union’s dedication to financial literacy, our personalized credit review program was designed to help you understand your credit report and provide tips to maintain a positive credit history. We aim to provide you with a solid financial foundation so you can save money on interest rates and rest assured that your credit is on target. Learn more and sign up for your personalized credit review today.