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Personal Credit Reports
What exactly is a Credit Report?
A credit report is a factual record of your credit payment history. It's provided to companies and individuals by credit bureaus for purposes permitted by law, usually to grant you
credit. The main purpose of a credit report is to help a credit grantor decide whether to grant you credit based upon your credit payment history. A credit report is a report generated
from your credit file (a database maintained by a credit bureau containing your credit history).
More than 190 million people in the United States have a credit card, car
loan, mortgage or student loan. Almost every one of them has a credit file. The information in your credit file is obtained directly from the companies you have credit with,
as well as from government agencies such as the legal court systems.
When you apply for any type of credit or financing, a credit
report is generally obtained which contains information from at least one of the three major credit bureaus (Experian - formerly TRW, Equifax and Trans Union). However, these are not the
only credit bureaus. There are hundreds of smaller credit bureaus around the country, but most credit grantors will look at information from one of the "Big Three."
There are different types of credit reports available. They include:
Consumer Credit Reports:
Click here to see the kind of information contained in a typical consumer credit reort.
Property Manager Credit Reports:
These reports are basically identical to a typical consumer credit report.
Business Credit Reports
Used to determine a business's credit worthiness, these reports typically include information on the primary business function and SIC code; company background information including company statistics such as
years in business, number of employees, estimated sales, principal(s) and their titles; typical consumer-report-type information such as
inquiries, accounts and status, public records. Sometimes includes payment trends of other companies by SIC group, showing how a company compares to the industry average. .
Employer Credit Reports
In addition to the information typically contained in a consumer credit report, may include current and previous employment verification;
education verification; address verification; Department of Motor Vehicles record check; and criminal records check.
Mortgage Broker Credit Reports
These special reports must meet or exceed all standards established by HUD, FHA, VA, FMHA, FNHA, FNMA and FHLMC. Contains consumer credit information nationwide merged from at least two
national credit repositories, and includes manually verified name, address and employment history when available, plus public record,
tradeline and inquiry information. Risk scoring models from the national bureaus can also be included.
A credit bureau collects and maintains information on the
majority of Americans, but they are not affiliated with the government in any way. You have some rights and protection through the Fair Credit Reporting Act (FCRA). The credit bureaus are for-profit corporations and they sell your personal
information for money. How much money? To give you an idea, Experian's annual sales exceed $1.6 Billion.
The credit bureaus make money by gathering your credit
information from credit grantors, listing the information in your credit file, then selling it to other credit grantors who want to to see your credit history before they decide to lend you money. If you have shown any tendency to pay
late or to default on paying your financial commitments, many credit grantors' computers are programmed to immediately reject your application.
Credit bureaus get your personal information from the same lenders who
grant you credit through agreements they have made that require the credit grantor to inform the credit bureau of everything that occurs in your relationship with the credit grantor.
For example, if you are late with a payment, this fact is quickly
reported to at least one of the major credit bureaus and is added to your credit history. Credit reports not only show how you are currently managing your credit, they are also histories of
everything you have done in the past as far as your credit is concerned.
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Why should I periodically review my credit report?
Identity Theft/Fraud: With identity theft on the rise in the
United States, the number one reason to review your credit report at least once a year is to detect and stop fraud – before you need your credit.
You've Never Seen It: You should at least review your credit
once in your life. See what the credit grantors know about you. It's amazing the amount of personal information that can be obtained in this one report.
Buying a Home or Car: Know ahead of time what appears on
your report to help you shop for the best rate and take care of inaccuracies or past due balances.
Renting/Relocating: Take your credit report with you!
Prospective landlords will be checking your credit, and you might just snag that great relocation by not having to wait for credit approval.
Divorce: You'll need to evaluate your financial position with your attorney. Make sure you check to see if there have been
any accounts opened that you might not have known about.
Bankruptcy: Catch all your credit accounts. Letting one slip by can cause financial grief in the future.
Self-Employed: New entrepenours better check their credit before applying for merchant accounts and other business services.
Need a Credit Card: Or any other credit line, for that matter.
It's always wise to check your credit report before applying in case there are any inaccuracies. Don't get caught surprised because someone else's information is on your credit report!
Financial Planning: Any long or short term financial planning
involves looking at your current financial position. And what better way to see that than reviewing your current credit report?
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How can I get a copy of my Credit Report?
 Your credit report is available to you in a number of ways. You can contact the credit
bureaus directly, which can often be a frustrating process as they usually have unmanned, voicemail-attended phone numbers. Also, it can take weeks to get your credit report, with no way other than
writing letters or leaving messages to follow up on orders or ask questions.
You can also find many companies licensed to sell you copies of
your credit report, usually at a reasonable fee. In addition, these companies usually have good customer service, have fast turn around for reports (next day service is not uncommon), and
often offer a "Merged Report" which contains information from all three major credit bureaus in one report. They tend to include lots of helpful information such as forms for disputing
inaccuracies you may find on your credit report. One such company is
Creditreport.com, located on the internet. They are
a Member of the Better Business Bureau and offer secure online ordering.
In addition, you are entitled to a free credit report if a credit
grantor used that report (from that credit bureau) to determine you unworthy of credit, employment or insurance. You have 60 days after being declined to obtain your free report.
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What Kind of Information Appears on the Credit Report?
Identifying Information
Items such as your name, any aliases, current and previous
addresses, social security number, possibly marital status.
Merchant Trade Lines or Credit Lines
These include all regular installment or revolving credit lines
such as department store cards, auto loans, mortgages, and credit cards. If you have any history of late payment or if the credit account was included in a bankruptcy, charged off, or put
into repossession, the listing will be considered negative or derogatory by all credit grantors.
NOTE: Not all credit accounts may be listed on your credit
report since not every credit grantor reports to the same credit bureaus. In addition, not all credit grantors report every credit account to the credit bureaus. For a thorough review of your
credit file, you should look at information from all three major credit bureaus.
Collection Accounts
When any credit account is referred to a collection agency or the
collections department of a credit grantor because of delinquency, non-payment, or other reason, it shows on the credit report as a collection account. Collection accounts can
appear as paid or unpaid accounts. Any account that shows as a collection account (whether paid or not) is considered very negative by credit grantors.
Court Records
Court records include bankruptcies, judgments, satisfied
judgments, liens, satisfied liens, and divorce. Most court records, including satisfied liens and/or judgments, are considered very negative by credit grantors.
Inquiries
Each time you apply for credit and a potential credit grantor
looks at your credit file, an "inquiry" appears on at least one of your credit bureau files. Inquiries can also appear when an existing credit grantor reviews your credit periodically (to
increase your credit line, etc.), or when you review your own credit report. These requests for your credit report are noted as part of your credit history file and can remain for 24 months.
 However, a credit grantor may find what it considers "excessive inquiries," and reject
your credit application. There are no guidelines or laws that govern the number of inquiries that consititute "excessive." It is each credit grantor's decision. Credit
grantors usually reject applications for this reason when they see several inquiries but no new credit. They would rather be safe than sorry. Some
companies make unauthorized inquiries to check your credit. Protect yourself from unauthorized inquiries by not giving out your personal information to a merchant (including addresses
and drivers licenses) until you are ready to actually apply for credit.
What's Not Included
Your credit report will not include information about your race,
salary history, religion, checking or savings accounts, stocks and bonds, medical history, personal assets, criminal record or personal background and lifestyle.
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How Long Does Negative (Derogatory) Information Appear on my Credit Report?
The Fair Credit Reporting Act (FCRA) requires that most
negative credit items be deleted from your credit bureau file after seven years. Exceptions include bankruptcy, which can be reported for up to ten years. The credit grantor or credit bureau
have the right to remove negative credit information whenever they please. Inquiries usually remain in your credit file for 24 months.
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Why Won't the Credit Grantor Let Me See My Credit Report?
Most credit grantors are not allowed by the credit bureaus to
show you your own credit report. However, credit bureaus and other companies do allow you to purchase your personal credit report for a fee. Warning: click here for more information before
ordering your report directly from the credit bureaus. In addition, the Fair Credit Reporting Act and other laws provide
for some consumers to receive free credit reports in certain cases or States. Click here for credit bureau rates.
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How do they determine I have "Bad Credit?"
Many people find out the hard way that  as little as one late payment can bring credit denials at every turn. It is a myth that lots of good credit can outweigh a little bit of
negative credit. Any negative credit at all can be a major credit obstacle for most people.
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Who Can Look at My Credit Report?
Not just used to grant credit anymore, your credit file is used
more and more as a measure of your character. Yes, prospective credit grantors will still review at least one of your credit reports before granting you credit. But, it is increasingly common for
insurance companies to review your credit before extending auto or health insurance. And many employers now check your credit before they consider you for a position. If you rent, you have
probably already been through a credit check to determine your worthiness as a renter. Basically, anyone who can prove a valid business purpose (and has your permission) can view your credit file. The Fair Credit Reporting Act has specific details.
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Business Credit Reports
There are different types of credit reports available. They include:
Consumer Credit Reports:
Click here to see the kind of information contained in a typical consumer credit reort.
Property Manager Credit Reports:
These reports are basically identical to a typical consumer credit report.
Business Credit Reports
Used to determine a business's credit worthiness, these reports typically include information on the primary business function and SIC code; company background information including company statistics such as years in business, number of employees, estimated sales, principal(s) and their titles; typical
consumer-report-type information such as inquiries, accounts and status, public records. Sometimes includes payment trends of other companies by SIC group,
showing how a company compares to the industry average. .
Employer Credit Reports
In addition to the information typically contained in a consumer credit report, may include current and previous employment verification; education
verification; address verification; Department of Motor Vehicles record check; and criminal records check.
Mortgage Broker Credit Reports
These special reports must meet or exceed all standards established by HUD, FHA, VA, FMHA, FNHA, FNMA and FHLMC. Contains consumer credit
information nationwide merged from at least two national credit repositories, and includes manually verified name, address and employment history when
available, plus public record, tradeline and inquiry information. Risk scoring models from the national bureaus can also be included
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