Credit reports are documents that contain your credit history, work history, and intimate personal information. Because there are three credit bureaus used in the USA, notably Experian, Equifax, and TransUnion, there can be differences between these reports. This is because creditors are not required by law to report to all of the credit reporting agencies. They also do not need to agree with each other.
One credit bureau may compile a report that is different from the other, which results in different scores. Because of this, you should keep track of your reports from all 3 bureaus.
The information collected by these agencies is used by lenders to determine whether they should lend to you and the amount with which you can be trusted. It can also be used to determine the interest rate and how regular you are with timely payments to other lenders.
These credit bureaus are also used by landlords, insurance companies, communications companies, and employers to determine if you are a “safe” customer to do business with.
What Information Do Credit Reports Contain?
Technically speaking, anything that is in public record can be included in your credit reports, and credit bureaus collect this information based on different criteria.
Personal information can include:
- Full legal name
- Associated phone numbers
- Associated addresses
- Social Security Number
Any sorts of bank accounts can also be included in your credit report. Personal loans, car loans, medical bills, credit cards, and other similar accounts can be reported to the bureaus.
Other credit information can include:
- Medical Bills
- Amount of Credit Accounts
- Amount of Revolving Debt
- Payment History
Public records can also be on your report, and this includes how many times your credit has been checked recently. Other public records that credit bureaus record are:
- Tax Liens
- Inquiries(hard and soft)
- Defaulting On a Loan
The Importance of Credit Reports
Your credit score is calculated by using the information that is contained in your 3 credit reports as recorded by the bureaus. Keeping this information up to date and accurate is very important because errors can hurt your credit score.
If your credit score is not ideal, it can keep you from buying or renting a home, buying a car, getting a government job, and opening new credit accounts. While most employers do not check your credit score, some banks and government jobs do, especially those that require a security clearance.
Check Your Credit Reports Regularly
As mentioned before, errors can occur with reporting by the credit agencies. This is why you should periodically request a copy of your credit reports from all 3 agencies and check them for anything unusual or strange. You should also check for errors like misspellings, old addresses, and phone numbers. When you find any issues, you should file a dispute with that particular credit bureau.
When you get your credit reports and study them, you will get a better understanding of how credit bureaus work and how they calculate your score. By disputing and removing bad entries, you can improve your chances of being approved for a car loan, mortgages, and second mortgages; and, you will also be able to enjoy better interest rates, costing you far less. Another benefit of learning how credit bureaus work is you will be able to predict your chances of approval and lower interest rates.
Equifax, Experian, and TransUnion allow you to request one free credit report per year. You are also eligible for a free report from all 3 bureaus if you have been a victim of identity theft or if you have been declined for anything based on your credit score. Outside of these times, you can purchase them in a variety of ways, and each bureau will have instructions on how to obtain your report.
Repairing Your Credit Report
While you can attempt to repair your credit yourself, it isn’t always recommended. Some things can take a long time to fix if certain resources are not available to you.
In these cases, you may need to call on a credit repair company to evaluate your credit reports and see what they can do. Depending on how bad your credit has been affected, the process can be long, difficult, and frustrating. With the rigorous pace of your daily life, you may not want to spend all of that time trying to stay in contact with the credit bureaus. Your best option, in that case, is to contact a credit repair company and get on the road to repairing your credit.