What is a credit report and what’s in it?
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 such as loans and credit cards, lenders may have similar questions about you. And to find the answers, they may check your credit reports. Read on to learn the definition of credit reports, why they’re 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.
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 your credit history 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.
There are dozens of places that may produce credit reports. But 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.
Credit reports vs. credit scores
Credit reports also 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’s report supplied the information used to calculate them.
What’s in a credit report?
While there may be slight differences between credit reports, they all generally include four categories of data that affect it: 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 of account, such as revolving credit, installment loan or mortgage.
- 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 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:
- Civil suits and court judgments.
- Tax liens.
- Overdue child support.
Bankruptcies and foreclosures can show up on your credit report for up to 10 years and seven years, respectively. However, a Chapter 13 bankruptcy filing will only stay on your credit report for seven years after the date it is filed, according to TransUnion.
If a lender has denied you credit because of information in your credit report, they must send you an adverse action notice with the reasoning behind the denial.
You might find two types of 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 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.
How to get a free credit report (and check it for errors)
Your credit report can determine your creditworthiness, so it’s a good idea to keep an eye on what’s in it. You can obtain one free credit report each year from each of the three major credit bureaus by visiting AnnualCreditReport.com.
When you receive copies of your credit reports, you’ll want to check all three credit reports for any personal, financial or other credit information errors. Any errors can potentially lower your credit scores. Errors to look out for include incorrect or inaccurate account numbers, addresses, credit limits or account status.
If you find any errors on your credit report, you can dispute them. Errors may also indicate that you have experienced identity theft, so you’ll want to keep tabs on your credit.
What you should 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 fraud alerts or a 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.
- Extended fraud alerts.
Initial fraud alerts are available if you suspect you have or will be a victim of identity theft.
Extended alerts are used if you have 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 credit 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 Social Security number. 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 the 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 have a Capital One product. 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 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.
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.
Ready to improve what you see on your credit reports? Check out these tips for how to improve your credit scores.
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 credit scoring models. Your CreditWise score is a good measure of your overall credit health, but it is not likely to be the same score used by creditors. The availability of the CreditWise tool depends on our ability to obtain your credit history from TransUnion. Some monitoring and alerts may not be available to you if the information you enter at enrollment does not match the information in your credit file at (or you do not have a file at) one or more consumer reporting agencies.
CreditWise Alerts are based on changes to your TransUnion and Experian® credit reports and information we find on the dark web.
The CreditWise Simulator provides an estimate of your score change and does not guarantee how your score may change.