What Is a Credit Report?
A look at what your credit report includes and why it’s important
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 like loans and credit cards, lenders may have similar questions about you. And to find the answers, many check your credit report. Read on to learn more about credit reports, why they’re important and what’s included in them.
Why Is Your Credit Report Important?
Your credit report provides information about your financial habits. Companies may use the data to predict how likely you are to repay debts on time. And that makes your credit report 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 can be so 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, too.
It’s also important to know there are three major credit bureaus that compile credit reports: 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.
Credit Reports and Credit Scores
Credit reports also play an important role in determining your credit score. That’s because credit scores are calculated using information from your credit report. You might think of your score as a quick summary of your credit report.
But keep in mind: 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’s report supplied the information used to calculate them.
What’s Included in Your Credit Report?
While there may be slight differences between credit reports, they all generally include four categories: personal information, credit accounts, public records and inquiries. You can find details about each below.
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.
- Phone numbers.
- 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:
- Type, such as revolving credit, installment loans or mortgages.
- Name of lender.
- Credit limit or loan amount.
- Account balance.
- Payment history.
- Date opened and closed, if applicable.
Depending on the credit bureau, you may also see a record of any collections. 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. Here are a few examples:
- Civil suits and court judgments.
- Tax liens.
- Overdue child support.
The three major credit bureaus stopped reporting civil judgments and tax liens in 2017. If you see those listed, it may be worth trying to correct the error on your credit report.
You might find two types of inquiries on your credit report. But only one can affect your credit score.
Hard inquiries on your credit report indicate a lender checked your report. They usually involve a decision about loaning money or extending credit. Hard inquiries can show up on your credit report for up to two years and may affect your credit score. 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 they won’t affect your credit score. In fact, soft inquiries don’t even appear on the credit reports potential lenders 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.
Checking Your Credit Reports
Your credit report can determine your creditworthiness, so it’s a good idea to keep an eye on what’s in it. You can get free copies of credit reports from the major credit bureaus every 12 months by visiting AnnualCreditReport.com. And through April 2021, the site is also offering free online weekly reports.
How to Start Monitoring Your Credit for Free Today
You could also use a tool like CreditWise from Capital One. It’s free for everyone—not just Capital One customers. And 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.
You can also check your VantageScore® 3.0 credit score for weekly updates. And the Credit Simulator can give you an idea about how financial decisions could affect your credit. Best of all, using CreditWise will never hurt your credit. That’s because it uses soft inquiries to monitor things.
You can sign up for CreditWise today to get a look at what’s in your credit report and more.
Government and private relief efforts vary by location and may have changed since this article was published. Consult a financial adviser or the relevant government agencies and private lenders for the most current information.
We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.
Your CreditWise score is calculated using the TransUnion® VantageScore® 3.0 model, which is one of many scoring models used by lenders. It likely won’t be the same model your lender uses, but it is an accurate measure of your credit health. The availability of the CreditWise tool depends on our ability to obtain your credit history from TransUnion. Alerts are based on changes to your TransUnion and Experian® credit reports and information we find on the dark web. The tool is not guaranteed to detect all identity theft.
The CreditWise Simulator provides an estimate of your score change and does not guarantee how your score may change.