All You Need to Know About The Credit Reports

What are Credit reports?

Credit reports list your bill payment history, loans and other financial information. If you have delinquent accounts, bankruptcies, foreclosures or lawsuits, these can also be found in your credit report.They show where you work and live and whether you've been sued, arrested, or filed for bankruptcy.

Every month, lenders submit updates on your credit profile to at least one of the three credit reporting companies—TransUnion, Equifax and Experian. Since lenders do not necessarily report to all three companies, the information on your credit reports may vary. It is also true that lenders report at different times of the month, a factor that might contribute to slight differences in your reports, and therefore your credit scores, at any given time.

What does your credit report contains(Equifax)?

• Identifying information

  This section of your Equifax credit report includes personal information, such as your name, address, Social Security number, and date of birth. The identifying information contained in your Equifax credit report is not used to calculate credit scores.

• Credit account information

  There are two types of inquiries: “soft” and “hard.”

“Soft” inquiries may result from your checking your own credit reports, companies extending you pre-approved offers of credit or insurance, or your current lenders and creditors conducting periodic reviews of your accounts (known as “account reviews.”) Soft inquiries do not impact credit scores. Regularly checking your credit reports can help you monitor your credit accounts and enable you to recognize inaccurate or incomplete information, or suspicious activity that may signal potential identity theft.

“Hard” inquiries occur when companies or individuals, such as a credit card company or loan servicer, review your Equifax credit report because you have applied for a job, credit or service – for example, a new loan, an apartment or rental home, a credit card, utility service, or a mobile phone contract. Hard inquiries remain on your Equifax credit report for two years and may negatively impact credit scores, although the impact may lessen with time.

• Bankruptcies

  Your Equifax credit report contains information about bankruptcy public records and related details such as the filing date and chapter (type of bankruptcy).

• Collections accounts

  This includes past-due accounts that have been turned over to a collection agency. These can include your credit accounts as well as accounts with doctors, hospitals, banks, retail stores, cable companies or mobile phone providers. You may also want to check your Equifax credit report if you’re planning a big purchase, such as a car or a home. Doing so can help you understand what lenders and creditors may see when you apply for credit.

About negative information on your credit report

Your report may have negative information, it tends to fall off after seven years, or 10 if you’ve been through bankruptcy. Positive information remains on your report for an average of 10 years from the day its corresponding account is closed.

This information applies to accounts like mortgages and car loans, which have fixed terms on the number of years for repayment. For revolving accounts, such as credit cards, your positive history will stay on your report for as long as the account is active.

But don’t worry, there is a place where you can explain some of the negative information. You have the right to attach a statement to your credit report that explains why, for example, you have a few late payments on your record.

This statement will be provided to anyone requesting your report. Life is complicated, and this statement might convince an otherwise apprehensive lender to give you a chance.