Most often, in order to buy their homes, people will finance the purchase with a mortgage from a lender. A lender will not lend money to any stranger without knowing the person and his/her history of paying back loans. Lenders rely on a credit report to determine if the borrower is a worthy candidate for a particular loan. This report can unlock important information regarding a person’s history and is important to keep untarnished for those wishing to get better rates and options from lenders. Therefore, it is important for you to know what is in your credit report.

Q: What is a credit report?
Q: Where do credit reports come from?
Q: What is a credit rating?
Q: Who is permitted to see your credit report?
Q: Who is permitted to see your credit report?
Q: Who decides whether to grant you a loan or not?
Q: Why is it important to have a copy of your credit report?
Q: How long does information stay on your credit report?
Q: How do you obtain a copy of your credit report?

Q: What is a credit report?
A: A credit report is an account of your credit activities. The report includes any credit accounts or loans you have, balances and your timeliness in keeping up with your payments. If applicable, it will also include information for any actions taken against you for unpaid due balances.
A report will also include identification information (current and previous addresses, social security, etc.), public records information and recent inquiries (names of those who have requested the report within the past year).

Q: Where do credit reports come from?
A: Credit reports are created and filed by Consumer Reporting Agencies (CRAs). Credit reports are stored in a national database and are individually supplied to those requesting the reports for a small fee. The credit bureau is the most common type of CRA.

Q: What is a credit rating?
A: A credit rating is used to assess the credit worthiness of an individual or corporation and is drawn from a credit report. Credit ratings are calculated from financial history and current assets and liabilities. A great credit rating can lead to great financial opportunities including a better job or getting a better interest rate when buying a home. Hence, it is extremely important to make sure all of your bill payments are paid on time to ensure a good rating.

Q: Who is permitted to see your credit report?
A: The credit agencies are permitted to give reports to creditors who are considering granting you credit, employers considering you for employment or retention, insurers considering you for an insurance policy, government agencies reviewing your financial status or government benefits or anyone else with a legitimate business need for the information, such as a potential landlord.

Q: Who decides whether to grant you a loan or not?
A: Only lenders can grant you loans. Lenders rely on credit reports supplied by the CRAs.

Q: Why is it important to have a copy of your credit report?
A: Before applying for credit (mortgages, credit cards, etc.), it is important to keep in mind that there could be errors on your report and it is worth knowing before lenders obtain the report. Additionally, credit reports disclose important and personal information and are often the target of fraud schemers. In order to avoid any unpleasant surprises, obtain your credit report to make sure everything is correct.

Q: How long does information stay on your credit report?
A: Generally, credit history remains on the report for 7 years except in the case of the bankruptcy, which could remain for 10 years, depending on what chapter of bankruptcy is filed.

Q: How do you obtain a copy of your credit report? 
A: Every individual or corporation is entitled one free credit report every year from each of the 3 major credit bureaus. Below is the contact information for each of the 3 major credit bureaus.

Equifax Credit Information Services, Inc
P.O. Box 740241
Atlanta, GA 30374
http://www.equifax.com
(800) 685-1111

 
Transunion, LLC
P.O. Box 105281
Atlanta, GA 30348-5281
http://www.transunion.com
1-877-322-8228

Experian (formerly TRW)
P.O. Box 2104
Allen, TX 75013-2104
http://www.experian.com
(888) 397-3742