What is a credit report and what’s in it?
January 18, 2024 7 min read
Imagine a friend asks to borrow your car. You might consider a few questions before you hand over the keys. Has this friend borrowed anything from you before? From someone else? If so, did your friend use it responsibly and return it on time?
When you apply for things such as loans and credit cards, lenders may have similar questions about you. And to find the answers, they may check your credit reports. A credit report is a summary of your credit history, including things like your debt, credit accounts and repayment history. Read on to learn why credit reports are important and what’s included in them.
Creditors use credit reports in addition to other factors to determine whether you’re eligible for a line of credit.
Your credit reports contain important information such as your credit history, public records and recent inquiries.
Checking your credit reports can help you understand what lenders might see when you apply for loans.
What is a credit report and why is it important?
A credit report is a statement that includes active and closed credit accounts, open dates, type of credit and payment history for each account. In other words, each credit report provides information about your financial habits.
The three major credit bureaus are Equifax®, Experian® and TransUnion®. Sometimes referred to as credit reporting agencies, these companies operate independently. And each has its own version of a credit report.
Companies may use the data to predict how likely you are to repay debts on time. And that makes your credit reports critical for decisions about whether to lend you money in the form of credit cards, mortgages, car loans and more.
But that’s just the start of why credit history is important. Information in your credit reports can also affect what interest rates you’re offered when you borrow money. And your credit history can affect insurance prices, utility deposits and even job applications.
Credit reports vs. credit scores
You might be wondering about the differences between a credit score versus a credit report. Credit reports play an important role in determining your credit scores. That’s because credit scores are calculated using information from your credit reports. You might think of your scores as a quick summary of your credit report.
But keep in mind that just as there are multiple credit reports, there are multiple credit scores. And scores can vary based on a variety of factors, including which bureau supplied the credit information.
What’s in a credit report?
While there may be slight differences between credit reports, they all generally include four components: personal information, credit accounts, public records and inquiries.
1. Personal information
The personal information section of your credit report may include a list of facts that identify you:
Name and any nicknames you’ve used with a credit account
Current and previous addresses
Date of birth
Social Security number (SSN)
Current and past employment information
2. Credit accounts
Under the credit accounts section of your report, you may find information about your borrowing and repayment history. That could include a list of current and previous accounts, including credit cards, mortgages, car loans and student loans. Each account listed will likely include other details, too:
Name of lender
Credit limit or loan amount
Date opened and closed, if applicable
Depending on the credit bureau, you may also see a record of any collections activity. Some agencies list those with credit accounts, while others classify them separately.
3. Public records
Your credit report might also list financial information reported through public records, which can show up as negative information on your report. Here are a few examples:
Foreclosures and bankruptcies can show up on your credit report for seven years and up to 10 years, respectively. If a lender has denied you credit because of information in your credit report, they must send you a notice with the reasoning behind the denial.
You might find both hard and soft inquiries on your credit report. But only one can affect your credit scores.
Hard inquiries appear on one or more of your credit reports when you apply for a loan and the lender has checked your report. They usually involve a decision about loaning money or extending credit. Hard inquiries can appear on your credit report for up to two years and may affect your credit scores. You might trigger a hard inquiry when you:
Apply for a credit card
Request a credit line increase
Apply for a loan
Apply for a mortgage
Apply to rent a house or apartment
Open an account for phone, cable or internet services
Soft inquiries involve simple reviews of your credit and won’t affect your credit scores—but they do appear on your credit report for up to two years. However, soft inquiries don’t appear on the credit reports for potential lenders to see. Soft inquiries may happen when you:
Check your own credit report
Get a quote from an insurance company
Apply for a job that requires a background check
Get a pre-qualified or pre-approved credit card offer
How to get a free credit report (and check it for errors)
You can obtain one free credit report each year from each of the three major credit bureaus by visiting AnnualCreditReport.com. Your credit report can help determine your creditworthiness, so it’s a good idea to keep an eye on what’s in it.
When you receive copies of your credit reports, you’ll want to check your reports for errors. Any errors can potentially lower your credit scores. Look out for incorrect account numbers, addresses, credit limits or account statuses.
If you find any errors on your credit report, you can dispute them. Errors may also indicate identity theft.
What to know about fraud alerts and credit freezes
If you suspect errors on your credit report may be due to identity theft, you may want to set up a fraud alert or credit freeze.
Setting up a fraud alert
To set up fraud alerts, contact one of the three major credit bureaus. The credit bureau you report the fraud alert to will contact the other two bureaus on your behalf.
There are two main types of fraud alerts:
Initial fraud alerts: Initial fraud alerts are available if you suspect you have been or will be a victim of identity theft.
Extended fraud alerts: Extended alerts are used if you’ve already been a victim of identity theft. The duration of an initial fraud alert is one year, while an extended alert lasts seven years.
To remove a fraud alert, you can submit a request or wait until the alert expires.
Applying a credit freeze to your report
You’ll want to inform your lenders and obtain a credit freeze on your credit report as soon as possible if someone gains access to your personal information, such as your SSN. It’s important to note that if you’ve put a credit freeze in place, creditors won’t be able to access a credit report to check eligibility for a new line of credit.
You won’t be able to open a new line of credit while the freeze is active. But the good news is that you have the option to lift a credit freeze if needed. And you’ll still have the ability to build credit while a credit freeze is in place.
How to monitor your credit for free
You can use a credit monitoring tool such as CreditWise from Capital One. It’s free for everyone—whether or not you’re already a Capital One customer. With CreditWise, you can access your TransUnion credit report as often as you would like without hurting your credit. Plus, you’ll get alerts when there are meaningful changes to your TransUnion and Experian credit reports.
The CreditWise Simulator can give you an idea about how financial decisions could affect your credit. And using CreditWise will never hurt your credit.
Credit reports in a nutshell
Your credit reports help lenders and other creditors understand your credit history and assess your creditworthiness. Checking your credit reports can help you know where you stand and spot potential errors or fraud related to your accounts.
Not satisfied with what you see on your credit reports? Check out these tips for how to improve your credit scores.