Best Way to Get Credit Reports - Check Your Credit Reports Today
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 your credit and/or insurance worthiness. Some employers also use them as part of the employment screening processes. And finally, they're used by collection agencies to assist with their debt collection efforts.
The biggest complaint most consumers have about credit reports is that they don't understand them. SmartCredit® has changed that. With SmartCredit®, you'll find a revolutionary SmartCredit® Report that is easy to understand and view. It is a first-of-a-kind tool where you can search, sort and, best of all, take action. You'll be able to see which negatives impact your credit score most and with the Action Button, you can take action directly with that creditor for anything you need.
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.
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 are 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 classified 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.
- Public records - Public record information is data included in the U.S. public record's system, and is readily accessible to anyone who wants to see it. Not all public record data is included on your credit report. The data is limited to tax liens, bankruptcies, and judgments.
Getting your credit report is an essential detail to your financial well-being. While online credit reports can vary in terms of how the information is displayed, the format of personal credit reports is generally the same. Knowing every aspect of your credit report and what goes into creating it, is a critical step that many consumers overlook.
In essence, a credit report is an overview of your entire credit history, as it has been reported to the credit reporting agencies by various sources. Not only does it show lenders how much debt you have collected over time, but it also lets them know whether or not you have paid various bills on time. Additionally, a credit report is also used to generate your credit score.
Below, we'll take a look at how credit reports are generated, what goes into the report, and how it affects your long-term financial status. Remember, with SmartCredit®, you can easily pull your credit report online.
A credit report can be thought of much like a report card of your credit history. As you collect credit and pay off debts, credit agencies will use that information to create a report that potential lenders will use to determine how much risk is involved in extending you credit, and whether or not you are likely to make payments on time.
Because each credit reporting agency operates independently, credit reports can often vary in what kind of information is displayed, but they all contain a general overview of your financial history.
Whether you apply for a credit card or a mortgage, lenders will take the personal information you have provided and contact a credit reporting agency with permissible purpose. Your credit report is then reviewed for approval. If approved, your personal information, as well as the new tradeline are then reported to one or all three of the major credit reporting agencies to be added to your credit report.
Additionally, credit reporting agencies can also use several other pieces of information to generate credit reports, which we will discuss in-depth below.
As previously mentioned, credit reports contain various types of information regarding your credit history, such as what types of credit you have used, the length of time that credit accounts have been opened, and how frequently you made payments on time. All of this data can be used by potential lenders to determine your overall financial responsibility.
Credit reports contain information from four categories of financial information: personally identifiable information, credit accounts, credit inquiries, and public records and collections.
Personally Identifiable Information (PII)
Personally identifiable information is somewhat self-explanatory as it refers to any data that can be used to identify you. This information includes items such as your name, current address, previous addresses, social security number, date of birth, and employment data. It is updated as you provide it to various lenders when applying for credit.
In some instances, a section called "consumer statement"" is also provided, which displays information such as security freezes, fraud alerts, power of attorney comments, or personal statements by the consumer.
While Personally Identifiable Information is not used to generate your credit score, it's imperative that all of the information in this section is displayed correctly. Any incorrect information should be disputed with the credit reporting agency that generated the credit report.
Credit accounts refer to each account you have established with various lenders. As you collect credit, lenders will report the type of account you have open with them (credit card, auto loan, student loan, etc.), the date the account was established, your credit limit or loan amount, your account balance, and your payment history.
Your payment history will also include whether or not you have made payments to each account on time, as well as any accounts that have been sent to collections.
Unlike personally identifiable information, credit reports are used to generate the bulk of your credit score, which means it's critical that each account is in good standing with each lender and is reporting accurately.
Even if your credit report says you're in good standing, it's still important to verify that you know about each account to prevent yourself from falling victim to identity theft.
Each time you apply for a loan or line of credit, you give the lender authorization to request a copy of your credit report. This is what is referred to as a credit inquiry, and there are two different types of inquiries as mentioned briefly above.
Hard inquiries are made by lenders each time you apply for a new credit account. If too many hard inquiries are made within a certain amount of time, it is often an indication of risk and can cause your credit score to be negatively affected.
Soft inquiries are made each time you view your credit report and can also be made when you are pre-approved for a loan or line of credit through the mail. Unlike hard inquiries, soft inquiries do not affect your credit score.
While it's likely that you are aware of each inquiry initiated by you, it's important to monitor your credit score to be sure that no other inquiries have been made without your knowledge. On your credit report, you will be able to see the name of the creditor who made the inquiry, their business type, and the date the inquiry was made.
If you suspect an inquiry was made without your knowledge, check with the credit agency that generated the credit report, and request additional information as to what sort of action can be taken to protect your credit score.
Public Record and Collections
Credit bureaus use public record information to collect data in regard to bankruptcies and debt collections. If you have any pending legal issues that directly affect your financial well-being, such as bankruptcies, liens, judgments, or wage garnishments, they will likely be included in this section of the credit report.
A bad credit score - even one that involves a debt collection - is not the end of the world. While these factors may appear on your credit report, it's still possible to improve the standing of your credit score.
In life, mistakes happen, and the same can be true when it comes to your credit report. In fact, the number one complaint involving credit reports pertains to the incorrect listing of information.
However, even a single error on your credit report can potentially create several headaches in the future, which makes it even more important that they are identified and disputed as quickly as possible.
Here are some common errors that you should look for on your credit report:
- Misspelling of your name, address, or other personal information.
- Having more open lines of credit or higher amounts of debt than you actually do.
- Former spouse's debts reflected as your own.
- Older debts that have not been removed.
- Closed accounts that do not state "closed by grantor."
- Mysterious accounts as the result of identity theft or confused identity.
While errors can be made when your information is reported to the credit reporting agencies, it's also essential to make sure that you are consistent in filling out your personal information when applying for various types of credit.
For example, if your name is Robert, be sure to fill out each application using your full name rather than variations of Robert, such as Rob. Doing so can help prevent inconsistencies in credit reports, as well prevent you from being denied credit due to "insufficient credit information."
If, however, you do find any errors, mistakes, or instances of identity theft, contact the credit reporting agency that provided you with your credit report as quickly as possible to report and dispute each error individually. If you use SmartCredit®, our Action Buttons can take care of this step easily with the push of a button.
When reporting errors, be sure to clearly identify each disputed item, explain why you believe the information is incorrect, and request each disputed item to be deleted or corrected. Once reported to the credit reporting agency, expect the investigation process to take between 30 to 45 days to complete.
You're entitled to receiving one free credit report every 12 months from each of the three major national credit reporting agencies. If you want to see precisely what is contributing to your credit score, sign up with SmartCredit® today to receive a credit report that is easy to read and understand all year round.
Your credit report is used to make very important decisions surrounding your finances. Whether a bank uses your credit report to approve you for a mortgage or an auto loan, or a credit card company uses it to approve you for a new line of credit, your credit report is a valuable tool in your financial future.
Not only is a credit report important to ensure that you remain in good standing with creditors, it's also critical that your credit report is regularly monitored so that you can dispute any errors, inaccuracies, or items that are a result of identity theft.
With SmartCredit®, you now have a simple and innovative way to read your credit reports and to become the master of your credit score. Sign up with SmartCredit® today.