A credit report is, in the Consumer Financial Protection Bureau's words, a statement that has information about your credit activity. Lenders use reports to decide on loans and credit cards, and the Federal Trade Commission notes they can also be used in decisions about insurance, renting a home and sometimes employment. This lesson walks through what a report contains and the basic rights the Fair Credit Reporting Act (FCRA) gives consumers. Each fact links to its source in the list at the end.
Who keeps credit reports
Credit reports are compiled by consumer reporting agencies, often called credit bureaus. Three are nationwide: Equifax, Experian and TransUnion. They are separate companies, and creditors aren't required to report to every one of them, so the three reports about the same person can differ. That is one reason people look at all three rather than one.
The main sections
Layouts vary by bureau, but the CFPB describes the same general contents:
- Personal information: name, current and past addresses, date of birth and similar identifying details. This section is used to match information to the right person; it isn't used to judge creditworthiness.
- Credit accounts: each loan or credit card, sometimes called a tradeline. An entry typically shows the lender, the type of account, when it was opened, the credit limit or loan amount, the balance and a month-by-month payment history.
- Collection items: debts that have been passed to a collection agency.
- Public records: for example, a bankruptcy.
- Inquiries: a list of who has requested the report and when.
The payment history is often the most detailed part of an account entry. It is usually shown as a row of months, each marked current or late, so a single late month stands out from a run of on-time payments.
A report is not a score
A credit score is a separate thing. The CFPB describes a score as a prediction of credit behavior, calculated from the information in credit reports. There is no single score: different scoring models, different bureaus' data and even the day of the calculation can produce different numbers. The FCRA section that gives consumers access to their file says the bureau isn't required to include credit scores in that disclosure, which is why a free report usually arrives without a score. Lesson 3 covers scores in general terms.
Your right to see your file
Section 609 of the FCRA (15 U.S.C. §1681g) requires a credit bureau, on request, to clearly and accurately disclose all the information in a consumer's file at the time of the request, the sources of that information and who has requested a report. That list of requesters generally covers the past year, or two years for reports requested for employment purposes.
Free copies are available through AnnualCreditReport.com. According to the FTC, the three nationwide bureaus have permanently extended a program that lets people check their report from each bureau once a week for free, and AnnualCreditReport.com is the only website authorized to fill orders for the free reports people are entitled to by law. The FTC also warns that other sites may imitate it or advertise "free" reports that come with strings attached.
How long information can stay
Section 605 of the FCRA (15 U.S.C. §1681c) sets time limits on reporting most negative information. Accounts placed for collection, charged-off accounts and most other adverse items generally can't be reported once they are more than seven years old; for collection and charged-off accounts that period is measured from 180 days after the delinquency began. Bankruptcies can be reported for up to ten years. Positive information, such as an account paid on time, has no such limit. Lesson 4 covers the details and exceptions.
When something looks wrong
The FTC notes that consumers can dispute mistakes in their reports, and that a dispute can be raised with the credit bureau and with the business that supplied the information. An unfamiliar account can also be a sign of identity theft, which the FTC handles through IdentityTheft.gov.
When a bureau receives a dispute, Section 611 of the FCRA (15 U.S.C. §1681i) requires it to conduct a reasonable reinvestigation and either correct the information, record its current status or delete it, generally within 30 days of receiving the dispute. That period can be extended by up to 15 days if the consumer sends additional relevant information during the 30 days. The bureau must send written notice of the results within five business days of finishing. Lesson 5 explains the process step by step, including what a dispute generally needs to identify.
Sources
- Consumer Financial Protection Bureau, What is a credit report?
- Consumer Financial Protection Bureau, What is a credit score?
- Federal Trade Commission, Free credit reports
- 15 U.S.C. §1681g (FCRA §609), Disclosures to consumers
- 15 U.S.C. §1681c (FCRA §605), Requirements relating to information contained in consumer reports
- 15 U.S.C. §1681i (FCRA §611), Procedure in case of disputed accuracy