- A credit report contains key information about your credit history, which can influence how easily you can access credit and at what interest rate.
- The report includes your personal information, credit accounts, credit inquiries and relevant public records, such as bankruptcies or late payments.
- You can request a free copy of your credit report to gain awareness of your credit history and report any errors.
Understanding your credit report can help you gain greater insight into your financial wellness. A credit report is a snapshot of an individual's or business's credit history. Credit reports are analyzed by financial institutions and lenders to determine eligibility for lines of credit, loans and mortgages.
Credit report definition
A credit report details your credit history and current credit activity, comprising records from your credit accounts and debt repayment history. This can include various types of accounts, from credit card companies and collection agencies to student loans and car loans.
What is on a credit report?
Learning what information is on a credit report can help you understand what lenders and other third parties see when they request yours.
A credit report contains extensive information including your credit score and personal information, credit accounts, credit inquiries or public records. This information can contribute to how your credit scores are calculated.
There are three major credit bureaus that provide credit reports: TransUnion, Equifax and Experian.
Your credit report contains several elements of your personal identification, including your date of birth and Social Security number, that help identify the report as belonging to you.
A credit report outlines your account history and contains a record of your current and historical credit accounts. This includes all types of credit: revolving credit lines, credit cards, home loans and other installment loans, such as auto loans. Prior credit accounts — for example, a loan paid in full — may also stay on your report for up to 10 years.
This section of a credit report also outlines:
- Current and/or closed account information: A list of current and former accounts, including the date(s) when each account was opened and closed
- Balance and payment history: The current or outstanding account balance for each line of credit, as well as each account’s credit limit, and a summary of past due or missed payments
- Lender contact information: Up-to-date contact information allows you to contact lenders if you have questions about the information on your credit report
Any hard and soft credit inquiries will be shown on your credit report, along with the dates of each credit check and the purpose of the inquiry. A hard inquiry is a request from the individual for a loan or line of credit, such as applying for a mortgage, and can affect your credit score, whereas a soft credit check is requested from an organization and may be without an individual's knowledge, such as pre-approval offers from credit card companies. This doesn't affect your credit score.
Applications for new credit that appear as a hard inquiry can slightly affect your credit score for up to two years. Soft inquiries, such as those made when checking your own credit score, will not affect your score.
The final section of a credit report will outline relevant public records that may be of interest to lenders, including bankruptcies, foreclosures and civil suits. Records may be listed on your credit report for 7–10 years.
Third parties, such as potential lenders, use the information in your credit report to make decisions about whether to approve or deny your credit application.
What is a credit report used for?
Lenders need to review applicants’ credit information to make informed decisions as to whether or not to grant them credit. As a result, they could request your credit report from any or all of the three national credit reporting agencies (CRAs) as mentioned above.
Parties and individuals that could access your credit report could include:
- Banks: A bank or other financial institution may review your credit report when you first open an account or when you apply for overdraft protection.
- Credit lenders: Lenders may review your credit report as part of the approval or pre-approval process for credit, such as a mortgage or credit card.
- Employers: Employers may request a credit report to verify an applicant’s identity, view past employers or as part of a larger background check to reduce the risk of theft.
- Insurance companies: Insurers may pull your credit report to assess your financial wellness and perceived risk level.
- Landlords: Landlords may use credit reports to confirm applicants’ identities and employment status, and both landlords and employers use credit reports to assess risk level.
- Utility companies: These companies may check your credit to ensure you’ll reliably be able to pay for their services.
With so many parties able to access your credit report, it’s important to ensure that the report is accurate and up to date.
How to read your credit report
The Consumer Financial Protection Bureau (CFPB) suggests consumers check their credit reports once a year at a minimum to ensure the information is correct and that there are no signs of identity theft.
If you’re planning to apply for a new credit card or a loan within the next few months, checking your credit report before applying can allow you ample time to dispute any errors or lift any credit freezes you may have in place.
How to obtain your credit report
Historically, you’ve been allowed access to one free credit report per credit reporting company (Equifax, Experian and TransUnion) each year through annualcreditreport.com. This is the only free credit report provided by the three nationwide credit reporting companies.
Credit reporting companies aren’t required to provide free credit scores along with their reports, so you’ll need to check those separately.
Furthermore, under the Fair Credit Reporting Act (FCRA), you’re entitled to an additional free copy of your credit report if you’ve been denied credit within the last 60 days. This can be done by contacting the three main credit reporting agencies.
Finding and disputing errors on your credit report
If you find errors in your credit report, you’ll be able to file a dispute with the credit bureau that provided the report. Each of the three credit bureaus — Equifax, TransUnion and Experian — can be contacted by mail, by phone or through online support.
To file a dispute, you’ll need to identify the specific area(s) in your report that contain errors, as well as gather supporting documentation to dispute the error. Send this information along with a letter to the credit reporting agency and to the information provider that supplied the inaccurate data. Please note that the lender or financial institution you’re applying for credit with won’t dispute errors on your behalf.
Why are credit reports important?
Your credit report is a major factor that lenders use to determine your creditworthiness. It can reveal whether you’re an at-risk borrower or showcase your solid credit history to help you get better interest rates on new credit accounts.
The information in your credit report affects many life decisions, such as where you can live and whether you can buy a vehicle, or whether you can refinance debt. Checking your report regularly should be a part of your financial planning.