What is a Credit Report?
A credit report (sometimes referred to as a credit file) is a record of how you pay your credit cards, mortgages, auto loans, student loans and other liabilities. Credit reports are used by financial institutions, credit grantors, insurance companies, and utility providers to determine credit and/or insurance worthiness. Some employers also use them as part of employment screening processes. And finally, they're used by collection agencies to assist with their debt collection efforts.
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About Credit Bureaus and those who send them Credit Information
Your credit report is compiled, maintained and distributed by three consumer credit reporting agencies (often known as Credit Bureaus), Equifax, Experian and TransUnion. Equifax is based in Atlanta, GA. Experian is based in the United Kingdom with their U.S headquarters in Costa Mesa, CA. TransUnion is based in Chicago, IL. The data housed in each of these companies is proactively supplied to them by a large network of data furnishers, specifically credit grantors and collection agencies. The credit reporting agencies also access credit related public record data.
Information Contained in Credit Reports
Credit reports are divided into several key areas of information, including personal data, account (or "trade") information, inquiries, collections, and public records.
- Personal data - The personal information included in a credit report includes your name, former names, address, former addresses, Social Security Number, date of birth, and sometimes employment. The information is used for identification purposes and matching the information supplied by credit grantors. The employment and income section is the least updated.
- Account/creditor/trade information - Account information includes a list of your liabilities. This will include credit cards, loans and family and child support obligations. This section also includes specific details about each of your accounts including the balance, credit limit (in the case of a credit card), original loan amount (in the case of a loan), the current payment status, date opened, and any historical delinquencies. If an account has been paid delinquent then a record of the delinquency will also be included. Accounts can be reported as being 30, 60, 90, or 120 days late, defaulted or included in bankruptcy. Historical payment data is also included and will indicate how late your payments have been in the past.
- Inquiries - Inquiries are a record of who accessed you credit report and on what date. They are added to your credit report when anyone (a creditor, collector, or consumer) obtains a copy of it, and even when you review it. There are two types of inquiries, hard and soft. Hard inquiries are normally the result of a consumer applying for some sort of credit card or a loan. Hard inquiries remain on your credit reports for 24 months. Soft inquiries are the results of credit card pre-approvals and account management activities by your existing creditors. When you request a copy of your credit report or monitor your own credit file, a soft inquiry is placed on your credit report. Soft inquiries remain on your credit report for 6 months.
- Collections - A collection is a record of a 3rd party company attempting to collect a defaulted or delinquent debt. Collection accounts include the name of the original creditor, the balance due, the date the collection was assigned, the collection agency name, and account number.