Understanding Your Credit Report | Bill Clanton

Understanding Your Credit Report

Understanding Your Credit Report

Credit is more important than ever. We use it for everything — groceries, clothing, travel, vehicles, our homes. But who collects our credit information, and what do they do with it? For some reason, the credit system is shrouded in mystery and many people don’t understand it fully. The following post will hopefully unwrap some of those mysteries and provide a guide to understanding your credit reports.

Who are the credit bureaus, and what is my credit report?

There are three primary credit reporting companies (or bureaus) who collect credit information for consumers and sell it to creditors: TransUnion, Experian, and Equifax. They keep a credit file on pretty much everyone in the United States, and they summarize their information into something called a credit report.
Your credit report is a part of your credit file that shows, in most cases, all of the credit activity over the last seven years. This includes every time you have been granted credit, and what you have done with that credit. Every credit card you’ve opened, every car you’ve financed, every loan you’ve had, shows up on your credit report for seven years after its closed.

How is my credit report used?

When you are trying to get a new line of credit, like when you apply for a credit card, home loan, or car loan, the business granting the credit (the creditor) will request your credit report in order to evaluate your history and decide whether or not to approve you. A creditor will pull your history from one or more of the credit bureaus. This process is  shows up on your report as an inquiry.

What does my credit report look like?

Each of the credit bureaus has a slightly different format, but they are basically the same. The categories on your credit report will include:

  • Sensitive personal information such as addresses you’ve lived at, phone numbers you have used, your social security number, and your date of birth;
  • A summary of account activity for each of your credit accounts;
  • Detailed information for each account you’ve had, such a balances and account numbers;
  • A history of inquiries; and
  • Any collections accounts or other negative information.

The credit bureaus are also required to provide certain informational documents alongside the credit report, like a summary of your rights under the Fair Credit Reporting Act.

Free Resources

To obtain a free copy of your credit report, you can visit: https://www.annualcreditreport.com/. You are entitled to one free copy of your credit report from each credit bureau each year under the Fair Credit Reporting Act, but due to the COVID-19 Pandemic, the bureaus are allowing consumers to obtain one free report per week through December 2023. Use this while you can!

If you have any questions or notice any errors on your credit report, please contact our office. We would love to help any way we can!

About The Author

Bill Clanton

Over the years my office has helped thousands of consumers who were cheated, ripped-off, and mistreated by debt collectors, credit reporting agencies, banks, credit unions, and car dealers. If you have a problem with a business being dishonest with you give me a call. I’d love to set them straight.