Get Your Questions About Credit Reports Answered
Most consumers have encountered a situation where they needed to access their credit file for personal reasons. Whether preparing to purchase a new home or vehicle, entering a new line of employment, or engaging in long-term planning, consumers often look to the credit report for assistance with their financial portfolio.
Employers, landlords, banks and other entities may request a credit report prior to extending job offers or loans. Information contained in the credit report is used by prospective employers and financial institutions to assess an applicant's overall level of stability and the likelihood that the individual will meet his or her obligation to the entity who is extending a job or credit offer.
Given that credit reports can have such a significant and long-lasting impact on a person's life, the topic of credit reporting and its effects on an individual's financial options should be of great importance to consumers. This article provides answers to some of the most frequently asked questions about credit reports and should help consumers to navigate the world of credit reports with greater ease.
1 - What is a credit report?
A credit report is a document compiled by the major credit bureaus, also known as credit reporting agencies, and contains a consumer’s financial history. A related document, the consumer report, is similar to the credit report but contains additional information that creditors cannot access. While credit bureaus do not themselves extend credit, they do report consumer account information that is provided to them by creditors. Most citizens of the United States will have an active credit file that is issued by each of the major credit bureaus.
2 - What kind of information is in my credit report?
The credit report contains information about accounts opened by a consumer and includes payment history, credit limit, account status and outstanding balance. The section pertaining to account status specifies whether an account is in collections, default or charge-off. The report also lists residential addresses and information gleaned from public records. This document shows the names and contact information of companies that have accessed a consumer’s credit report and usually provides the date and reason for the inquiry.
3 - How can I order my credit report?
Credit reports can be ordered online or by telephone. The report can be ordered in electronic or print format. In addition, persons who are visually or hearing impaired can access their credit files in alternate formats. The desired format should be specified at the time that the order is placed.
In many states consumers are entitled to receive one free credit report each year from each of the major credit bureaus. Eligible consumers can order a free annual credit report from each credit bureau. Credit reports can be ordered individually at the websites for Experian, Equifax and Transunion.
4 - What should I do if my credit report contains incorrect information?
Consumers can correct inaccurate information in their credit file by filing a dispute, which can be done online, by mail or by telephone. When disputing an item, he or she will need to provide a reason, such as the account is already paid or the residential address provided in the credit report is inaccurate. The credit bureau will contact the company whose information the consumer is disputing and will make changes to the consumer's file if warranted. A person who files a dispute can expect to wait several weeks for a complete resolution of certain issues, while other disputes may be resolved within a few days.
5 - Where can I get more information about credit reports?
The websites for Experian, Equifax and Transunion provide additional and more in-depth information on every topic related to credit reports and credit scores. A consumer-friendly website sponsored by Experian provides comprehensive information for those who wish to learn about the credit reporting process and how to read a credit file. The website for the Federal Trade Commission offers a solid knowledge base that includes links to order credit reports, reporting identity theft and registering for the national do not call list.
It is a good practice to order a credit report at least every two years and ideally once per year. Being informed about the contents of one's credit report, and making corrections when necessary, is a sure way to ensure access to the best financial options that are available on the market.