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Simply stated, your credit report is a continual look at how you mange your bills, debts and finances. Your creditors typically report your payment history to the major credit reporting agencies but sometimes reports can also come from the court system, public records, and some debt collection agencies.
Here´s a look into what you´ll typically find on a credit report.
Personal Information
While not used to gauge your credit history, your personal information is listed so that potential creditors can verify your identity and ensure that your application is accurate. This information includes:
Your Full Name
Any Name Variations (i.e. Maiden name)
Social Security Number
Birth Date
Current and Previous Addresses
Current and Previous Places of Employment
Driver´s License Number and Issuing State
Public Records and Collection Accounts
If you owe a creditor or tax agency and do not pay, then it may very well lead to a public lien that appears on your credit report. Public records might also include filings of personal bankruptcy, foreclosures, child support delinquency, court judgments that have been levied against you, and collection accounts that have remain unpaid. While most items will remain on your report for a period of seven years, bankruptcies can remain on your credit report for ten years.
Credit History and Outstanding Obligations
This is essentially a summary of all of your transactions relating to credit?auto loans, credit cards, installment accounts, mortgages, etc. This is the heart of the credit report and each item will show your payment history, late payments, credit lines, amount owed, and more. Your lenders will post your performance in their monthly reporting to the agencies and these items can remain on your credit report for seven years. While this isn´t a problem for positive reporting, accurate negative comments can affect your credit and buying power for quite some time.
Credit Inquiries
Every time you seek new credit and the potential creditor reviews your credit report, an inquiry will be noted. Too many inquiries in a short amount of time, especially without the granting of credit, can be viewed negatively by other creditors´as though you are in a financial bind. Any inquiries made by direct marketing companies looking for potential customers, your current creditors, or yourself are not viewed negatively.
Based on all of the above information, creditors are able to gather the insight they need to determine how much credit they feel comfortable extending to you, how high the probability is that you´ll pay it back, and whether or not the monthly payments are well within your means. All of this translates into an approval or a denial of credit, which is why maintaining good credit (or repairing it if it´d bad), is so critically important.
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