Credit Report FAQs
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Most Frequently Asked Questions and answers regarding credit reports and how this information affects you. (Click on each link to extend)
Q.1 What is a credit report?
A credit report, also known as a “consumer report,” contains information about your credit worthiness. Your information is on file with the three credit bureaus, or “consumer reporting agencies” (Experian, Equifax and TransUnion). Your credit information consists of a “track record” of payments on accounts such as loans and credit card accounts. When you apply for credit or loans or in many cases today, if you apply for a job, the credit company or employer often obtains a copy or your credit report from one of the credit bureau, this helps them decide whether to grant you credit or employment. Typically your authorization is needed for a third party to make inquiries about your credit to one of the bureaus.
Q.2 What are credit bureaus and how to they get my information?
Credit bureaus are in fact “information clearinghouses”. They collect and store consumer information provided to them by many of your creditors. This information is relayed to the credit bureaus on a periodically, and it is all mostly done electronically. The credit bureaus then assemble and deliver consumer information, for a fee, to their business customers, and any third party that can legally request a copy of your credit report. You as the owner of the information have the right to obtain a free copy of your credit report from all 3 bureaus once a year.
Q.3 How do I know if I'm being denied credit because of my credit report?
Federal and State law (in some states) require that creditors disclose to you the specific reason for your denial of credit. You must also be told the name and address of the credit bureau that provided the report, to help you contact that bureau if you feel the information provided by the bureau is erroneous.
Q.4 How can I see my credit report from all 3 credit bureaus?
Federal law requires credit bureaus to provide each consumer with a free credit report once a year, upon the consumer’s request. The 3 credit bureaus organize and run www.annualcreditreport.com , to make it easy for consumers to make these requests. You may also order your reports by calling 1-877-322-8228. You are also entitled to request a free copy of your report if you have recently been denied credit based on your report, or if you believe you are the victim of identity theft. If you want additional reports after receiving any free ones to which you are entitled, the credit bureau may change you an additional fee per report.
Q.5 What kind of information does my credit report contain?
Credit information on your report will differ from bureau to bureau, but each contains a list of your creditors, as well as a history of your payment habits and other personal information. Specifically, the report will include:
- A list of current and past accounts, to include credit cards, loans, department store cards, etc
- Your credit limits, highest amount borrowed or initial balance on each of your accounts.
- The current status of each account
- The maximum delinquency for each account, meaning how far behind you've been in the past.
- An inquiry list. The list of of companies that have received copies of your credit report.
- Other information deemed relevant to your credit worthiness, including any collection actions, bankruptcies, liens or judgments.
- Your credit score will be shown to you if you make the request to see it. This is not included in your free copy of your credit report, it typically costs a fee to get your score.
Q.6 How do I know if the information on my credit report is correct?
That’s your responsibility. Credit bureaus are not infallible, they often record erroneous entries or update credit information incorrectly. In some cases information regarding a consumer with a name similar to yours may be included in your report, or incorrect information may have been provided by various merchants to the credit bureau. Closed accounts may still show as open, and resolved collections accounts may show as delinquent. It is up to you “the consumer” to make sure your credit history is updated accordingly. Unfortunately there’s nothing that the bureaus will do until you begin disputing incorrect information.
Q.7 What can I do to correct errors in my credit report?
You begin by requesting that the credit bureau investigate each disputed item. Federal law is not very specific, requiring that such investigations be completed “within a reasonable period of time.” If at the end of that period you are proven correct, or if the original information cannot be verified, the bureau must remove the information from its records. It cannot reinsert the information at a later date, unless it is first verified. After the credit bureau completes its investigation, the law requires that you be notified immediately about the results of their investigation.
If you were denied credit due to these errors on your credit report, you can also request that the bureau provide the creditor or lender that denied you credit with a new copy of your credit report.
Q.8 If a bad credit report was the reason of a dispute with me and a creditor, how can I show this in my credit report?
You can summarize your description of a disputed claim, and that summary must be included in each future report. Depending on the credit bureau, you may be limited to two hundred (200) words.
Q.9 How long until negative entries on my credit report can be removed?
Federal laws have set the limits for how long these negative entries can remain on your credit report. Those laws, which may be supplemented by state laws, state that bankruptcies can remain on your credit report no longer than ten 10 years. Any other negative information must not remain more than seven 7 years.
Q.10 Can anyone get a copy of my credit report? Can I get a copy of someone else's report?
No. Federal and state laws allow release of your report only to those who have a “legitimate business need” for the information. Credit bureaus are private companies providing information to “subscribers,” who pay for the service and who utilize the information to make credit decisions. Those users of the reports must certify their identities, and the uses for which they need your report. The penalties for violations of these confidentiality laws are harsh: a person who falsely obtains information from a credit bureau, or a credit bureau employee who knowingly releases information to someone not authorized to see it, may be fined and/or imprisoned by a court of law. In addition, a court may find a credit bureau liable for money damages, and may order that it pay attorneys’ fees in a civil action brought by the consumer.
Q.11 What other types of reports contain my personal information?
There are other types of reports called “investigative consumer reports,” and are used primarily for insurance and employment purposes. They may contain information, gathered through interviews with friends or neighbors, regarding your reputation and lifestyle. Insurance companies and prospective employers are frequent users of this type of report.
The rules are different for accessing this type of report. You must be notified in writing when such a report has been requested or is being prepared. The notice to you must also make clear that you have the right to receive a copy of the report when it is completed.
Q.12 Are credit repair companies effective at removing errors from my credit report?
No. Credit repair companies do the same thing you would, which is appeal your negative entries with the credit bureaus. If a credit bureau can demonstrate that the verification requests are “frivolous”, which is typically how credit repair agencies are seen, then the time limit no longer applies. If a credit bureau argued that you disputed all your negative entries without good cause or evidence, they would most likely prevail in showing that the appeals were frivolous. Upon such a showing, the items would remain on your credit report.
Q.13 How do I contact the credit bureaus myself?
Experian Experian Consumer Assistance Center P.O. Box 2002 Allen, TX 75013-2104 1-888-397-3742
TransUnion Trans Union Consumer Relations P.O. Box 1000 Chester, PA 19022 1-800-888-4213
Equifax Information Consultant Equifax Credit Information Services Equifax Information Service Center P.O. Box 740250 Atlanta, GA 30374-0250 1-800-685-1111
Q.14 How can I stop credit offers from flooding my mail box?
To “opt out” and have your name removed from mailing lists provided by the three largest credit reporting networks, call the toll free telephone number 1-888-567-8688, and provide the requested information.
Q.15 Should I be concerned about credit fraud?
Yes. Credit fraud is a serious problem affecting millions of people every year. When credit fraud occurs involving one of your accounts, it is you the consumer who is held responsible for the debt until you can prove it was fraud. Creditors cover this loss by charging cardholders higher interest rates. Credit card fraud can go undetected for several months and cost you a lot of time and money to repair the damages.
Q.16 What is revolving account?
Revolving Accounts those with open terms and varying payments. This means that your monthly payments will vary depending on the balance of the account. Your revolving accounts include all your major credit cards and department store cards.
When you open a revolving account you are given a maximum amount that you can charge this is known as a credit limit. It’s up to you how much of your limit you want to charge, remember that when you have high balances your credit score and overall credit worthiness decreases. The amount that you owe will change each month, depending on how much of your limit you have charged.
Q.17 What is an installment account?
Installment Accounts are those with fixed terms and regular payments. These include car loans, student loans, mortgages, or personal loans.