What Is a Credit Report and Why Is It Important?

Your credit report is a compilation of information about the way you handle debt. It includes information about how much debt you’ve accumulated, how you pay your bills, where you live, where you work, whether you’ve filed bankruptcy, and whether you’ve had a home foreclosed or vehicle repossessed. If it sounds like your credit report contains a lot of information, that’s because it does.

How Does Information Get On Your Credit Report?

Credit reports are maintained by businesses known as credit bureaus or credit reporting agencies. Companies that you do business with have agreed to send your debt information to credit bureaus who then update that information in your credit report. Most of your credit card and loan accounts are updated on your credit report monthly.

Some businesses don’t update your credit report until you’ve been seriously delinquent on your payments. For example, your cable bill isn’t automatically included in your credit report, but if you fall more than six months behind on your payments, the bill might be listed on your credit report as a debt collection. It is important to fix credit items that are derogatory, because these are going to bring down your overall score.

What Type of Information is Included In Credit Reports?

Credit reports include basic identifying information like your name, address, and place of employment.

Your credit report contains detailed information about your credit cards and loans. For credit cards, your balance, credit limit, account type, account status, and payment history are all included on your credit report. Loan balances, original loan amount, and payment history appear on your credit report.

Public records like bankruptcy, foreclosure, repossessions, and tax liens are listed on your credit report. You should file a credit dispute to challenge the accuracy of any item you believe is in error.

Credit reports include a list of businesses that have recently checked your credit history either as a result of an application you made or a promotional screening.

You Can (and Should) Check Your Credit Report

You should order your credit report at least once a year to make sure the information listed on it is correct. If you suspect you’ve been a victim of identity theft, you should monitor your credit report more frequently. You can order your credit report in a few ways: for free through a website the government set up for that purpose, for free via a promotional offer, or by purchasing from one of the three credit bureaus.

Credit reports include a list of businesses that have recently checked your credit history either as a result of an application you made or a promotional screening.

Why Your Credit Report is Important?

A variety of businesses check your credit report to make decisions about you. Banks check your credit report before approving you for credit cards and loans, including a mortgage or auto loan. Landlords review your credit report to decide whether to rent to you. Some employers check credit reports as part of the application process. Your credit report affects many parts of your life, so it’s important that the information included is accurate and positive.

If you find that you have bad credit listings on your report it is important to correct these listings immediately. You can do this yourself or you can hire a professional credit repair service to work on your behalf.

For more about how you can repair your credit and clean credit from your credit files with the bureaus by filling a credit dispute visit us.