A credit report is a detailed record of your financial history. Your credit report reveals your current and past loans, the timeliness of your bill payments, credit inquiries, and other items related to your borrowing history.
To better understand your credit report you need to know 3 things:
- How items appear on your credit report
- Who manages and maintains your credit report
- How to get a copy of your credit report
Let’s start by learning how items appear on your credit report.
Whenever you borrow money, or apply to borrow money, the company lending you the money (the creditor) reports it to a credit agency.
A credit agency, also known as a credit bureau, gathers your payment history from all of your creditors, and puts this information into a single credit file. This file gives a complete overview of your bill paying history. There are three main credit bureaus: 1. Experian, 2. Equifax, and 3. Transunion.
When you make payments on time, and handle your credit responsibly, your creditors will submit this positive information to the credit bureaus. If you’re late on payments, don’t pay your loans in full, or don’t pay back the loan, this negative information is passed along to the credit bureaus.
The credit bureaus take this information (both good and bad) and create a detailed credit report. In addition to the report, the bureaus may assign a score that represents your overall credit worthiness. Your credit history, combined with this score helps future lenders determine whether or not to lend you money.
Getting a Copy of Your Credit Report
As a consumer, it’s important for you to continually monitor and review your credit report. Whether you have good credit, or bad credit, it’s important to know what your creditors are reporting to the credit bureaus.
You may think “I pay my bills on time, I don’t need to worry about my credit report”, however, credit reports often contain errors that can lower your credit score. Knowing what’s on your credit report helps you understand when problems arise.
There’s no excuse not to know what’s on your credit report. Thanks to the government, you’re entitled to one free credit report from each of the major bureaus every year. To request a copy of your credit report, you will need to visit each credit bureaus website, and request a copy of your report.
I’ve included links to each credit bureau below, so you can request a free copy of your credit report.
Experian – http://www.experian.com/
Equifax – http://www.equifax.com/home/en_us
TransUnion – http://www.transunion.com/
There are several companies out there selling 3-in-1 credit reports, which provide all three reports from a single website, however, these reports typically cost money. You can request your report free by going to each of the sites I mentioned above.
Once you know what’s on your credit report, you can determine whether or not you need to repair your credit. If you have bad credit, or negative items on your report, I highly recommend working with a professional and reputable credit repair agency to help you get your credit back on track.
