Credit Report FAQ
The Credit Report FAQ section offers a convenient way to find quick solutions for frequently asked questions. We include FAQs for other credit related topics in other sections of the site. The following credit report questions and answers are focused on common issues involved with credit reports.
You can learn from them and take charge of your credit. Start by studying the information we offer about credit reports on this website.
What is a Credit Report?
It’s a document that lists a person’s credit history. Also called a “credit file,” a “credit record,” and a “credit profile,” the report lists credit accounts the person has held, especially their amounts, terms and their account payment histories. All of this information is useful for evaluating an individual’s consumer behavior and the risk they pose for a new credit account. Credit reports are generally issued by consumer reporting agencies, also known as credit bureaus.
What is a Credit Bureau?
A company that gathers consumer or credit-related information on individual persons and businesses and then processes it for distribution to those who request it, usually in a report format. Credit bureaus are also known as consumer reporting agencies in the United States. In the U.K., they are commonly referred to more intuitively with the term, “credit reference agencies.”
How do I get my credit report from the bureaus?
Contact them and request it. If you are a person seeking it for yourself, it would benefit you to have your personal consumer credit report from each of the “Big 3” bureaus: Equifax, Experian, and TransUnion. Find out how to get your free personal credit report here.
There are also specialized consumer credit reporting companies such as ChexSystems. They provide financial institutions with information about personal checking and savings bank account histories. This is mostly used by the consumer banking industry for making decisions about opening new accounts.
You can contact them to see your ChexSystems consumer report.
If you are seeking a business credit report, then you can contact bureaus that provide them. Among the most widely recognized are Dun & Bradstreet’s Paydex Score and their Commercial Score Report.
Find answers to questions about these commercial credit reporting systems here.
Is it possible to get a free credit report?
In recent years is has become widely recognized that credit is an essential utility for society as it determines a person’s ability to be offered housing, jobs, and credit upon which other needs such as telephones, internet service and insurance depend. With this realization came the federal law that requires each of the “Big Three” consumer reporting agencies to provide you with a free credit report, upon your request.
You must order your free report through the official website setup for it at www.annualCreditReport.com if you want to take advantage of this benefit. You should also read our webpage explaining how you can use the free reports to monitor your credit.
Where do credit bureaus get the information used in reports?
Most of this information comes from creditors who have had a direct relationship with the consumer either as an applicant or as account holder. The information also originates with others who subscribe to databases that aggregate consumer information coming from diverse sources such as collection companies and banks, insurance and utility companies, landlords, public records data miners and others.
What should I do when I receive my report?
The first thing to do is review it for obvious errors and items that are being reported negatively about you. Make sure the report is about you by checking all names listed in it, addresses, social security number, past employers and anything else that could signal the information belongs to someone else. It happens more often than you’d think it would, so it’s wise to double check it.
If you find any mistakes or derogatory information, then you should make a note of it so that you can research the issues, accounts, dates and history of the item. This will help you later when you dispute the item and request (or demand) that it be removed from your profile.
Federal consumer protection laws ensure your legal rights to have only accurate information reported about you. You can challenge items that you disagree with, often having them removed if they cannot be verified by the creditor in question.
Can I have mistakes in my report corrected or removed?
Despite industry claims to the contrary, information in consumer credit reports is often found to be inaccurate. Thousands of people every year are able to have negative, incorrect information reported about them removed by disputing it.
These disputes can be directed at the creditors reporting the information about you, or you can dispute these items with the credit bureaus. The bureaus are required by federal law to investigate your claim within 30 days, and to either verify the item’s accuracy or remove it if it cannot be sufficiently verified.
I paid off a judgment so why does it show in my report as unpaid?
Judgments and liens are a type of credit related item on your report that originates with the courts. For this reason, they require a legal notice to be filed with the proper office for the credit bureaus to be updated that the judgment has been satisfied.
You can usually obtain this notice and forward it to the credit reporting agencies to update your credit profile. You should also make sure the notice is provided to the reporting office or plaintiff so that they can update their records. Otherwise, you might find that the judgment or lien is again reported incorrectly as unpaid.
How long do negative items show in my credit report?
There are some differences between states, so it’s important to check state credit reporting laws in addition to federal requirements. Most consumer items with derogatory history fall off your record at the end of 7 years since the item became delinquent. There are more serious events such as bankruptcy that remain on your credit profile for up to 10 years.
However, serious delinquencies including foreclosure, collections and charge-offs are usually required to be removed at the end of 7 years from the date it defaulted with the original creditor. It’s important to realize that the date doesn’t begin with the time it was reported as becoming a collection or a charged-off account.
Again, the clock starts with the moment it became delinquent with the original creditor. If you have reason to believe your account’s delinquency started earlier than reported, you can dispute the item and have it either corrected or removed for being inaccurate. Some unpaid tax liens may remain on your credit record indefinitely.
Does a credit inquiry harm my score every time I apply?
When you “inquire” about credit by providing your identifying information so that a credit check takes place, these inquiries are reported in your profile. However, if you check your own credit report and scores, then it is considered a “soft inquiry” instead of a true “consumer credit inquiry.” Such soft credit inquiries are believed to not have any effect on your credit profile or scores.
Having multiple consumer inquiries however, can negatively affect your score. This is because a lender may think you are having trouble obtaining credit or that you are desperate for credit to get through difficult financial circumstances.
How long will inquiries remain visible in my record?
Both soft and hard inquiries will generally stay on your credit record for 2 years. The effect of inquiries diminishes over time, so that after about 12 months the effect on your creditworthiness or score is negligible.