Your Credit Report

A credit report is a report from a credit bureau containing detailed information bearing on credit-worthiness, including the individual's credit history.

A typical credit report includes the following:

Personal information. This is to identify the individual, hopefully distinguishing him or her from every other individual on the planet. It includes social security number, current and past addresses, and current employment.

Information from public records (states and counties). This includes liens, garnishments, foreclosures, bankruptcies, law-suits and judgments.

Information from collection agencies. This consists of past due debts that have been given to collection agencies to collect.

Information from creditors. This includes the identity of the creditor, the date the relationship began, the current status of each account including the amount outstanding, the maximum line if any, current status of the account, and past delinquencies.

Information about inquiries. This identifies companies that have requested the individual’s file within the last two years, distinguishing those authorized by the consumer and those not so authorized. Only the former affect credit scores.

There are three major repositories of credit information: Equifax, Experian and Trans Union. The information provided by the three is not exactly the same because not all credit grantors report information to all three.

At one time, mortgage underwriters with responsibility for determining whether or not a mortgage applicant was "credit worthy" spent much of their time studying and interpreting credit reports. Increasingly, however, this judgment is being based on credit scores, which are derived mechanically from information in the credit reports. Credit scores are discussed later.

Errors in Credit Reports

The credit reporting system is imperfect. Credit grantors, which are the source of much of the information that goes to the three credit bureaus, make mistakes. Some are due to sloppiness, some to confusion over names, and some are intentional. Some lenders deliberately withhold information on timely payments and maximum credit lines to prevent a customer’s credit score from rising, because it might result in losing the customer.

The credit bureaus also make mistakes. They have no financial interest in keeping anyone’s credit score low, but they do have a financial interest in managing their enormous databases at the lowest possible cost. The more common is your name, the higher is the probability that your file contains information pertaining to someone else with the same name.

Errors from credit grantors and credit bureaus are of both omission and commission. An error of omission is a piece of information which should be in your file but isn’t. An error of commission is the placing of information in your file that doesn’t belong there. Whatever the source, errors can adversely affect your credit report. Click on our sponsor to get your credit scrore back on track!

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