Questions Frequently Asked by Consumers about Credit Reports and Scores

There are many questions which come to mind in connection with credit reports and credit scores. Each of these questions deserves complete and honest answers. The primary goal of this website is to answer as many questions as possible and to provide pertinent information regarding the different issues which may present themselves in regards to a person’s credit score.

The questions contained on these pages are the ones which are most commonly asked by consumers in relation to matters of credit reports and scores.

Credit Report – What is the Purpose?

A credit report has one specific purpose – to provide information to potential creditors about the stability of a person’s financial status. This includes providing information about how likely a person is to repay obligations in the time agreed upon. Past payment history has a huge impact on this.

Who Has Access to a Person’s Credit Report?

The law is very clear in this area and does not allow an individual access to another person’s credit report without their express permission and knowledge. These laws are in place to protect individuals from unauthorized access of this information thus protecting them against identity theft. For this reason a person’s credit report may only be accessed by businesses with legitimate reasons for doing so.

What is in a Credit Report?

There are many important details about a person’s life which are contained within a credit report. This compilation of information about a person’s financial status is how potential creditors and lenders determine if a person is considered to be a worthy credit risk. Some of the information which you can expect to find in a credit report includes the following:

  • Address
  • Payment history
  • Previous lawsuits
  • Previous arrests
  • Late or missed payments
  • Defaulted loans
  • Bankruptcy filings

Gaining Access to your Credit Report

Equifax, TransUnion and Experian are the three national credit bureaus which are responsible for reporting credit scores throughout the country. These agencies collect information on everyone and are required by law to provide anyone with this information upon request free of charge once every year.

There are three ways in which a person can gain access to this information:

  • Through a website set up by the national credit bureaus at annualcreditreport.com
  • By telephone at 877-322-8228
  • By mail

    • Steps to take if Credit Report Information is Incorrect

    Mistakes can be made anywhere and credit bureaus are no exception. There will be times when inaccuracies are discovered in a credit report. When this happens it is very important that you know what steps to take to get this information corrected as quickly as possible. The longer it goes uncorrected the more it will impact your credit score in a negative way. After a certain period of time this information cannot be changed so timing is essential. In order for this information to be corrected you must provide proof of the error in writing. When doing this always keep original documentation for your own records and send copies of this to the credit agencies.

    Check Your Credit Report Often

    It is recommended that every person check their credit report at least once each year to be sure that the information is accurate and if discrepancies are found they should immediately be reported.

    Personal Credit vs. Business Credit – What is the Difference?

    The only real difference between these two types of credit reports is that a personal credit report contains essential information collected in reference to a specific person, whereas, a business credit report contains information on a specific business as a whole.

    Credit Score – How is it Determined?

    Credit score is the term that is given in reference to a specific person’s risk level when applying for anything that requires credit such as a loan for school or to purchase a home. In order to determine credit scores each credit agency must have a record of at least one account that has been open for more than six months as well as one that has been updated in that amount of time. Generally the more recent the information these reports contain the more recent the credit score will be.

    Improving your Credit Score

    Two of the most common ways to improve your credit rating include the following suggestions:

  • Limit the use of credit cards – When your credit card balances are high it has a negative effect on your overall credit score even when the balance is paid off each month.
  • Keep balances low – By having low balances on your credit cards it will give lenders the appearance that you don’t really need more credit. This will help to lower your credit score.

The Effects of Bankruptcy

Bankruptcy has a seriously negative impact on your credit score and is often viewed even less favorably than someone who is frequently late in making payments. When you file for bankruptcy it can stay on your credit report for up to a decade and this is an option that should only be considered as a very last resort.

If you are looking for a free credit report from 3 bureaus, click here.