Solving the Mystery of Credit Reports
Applying for credit can cause anxiety. Especially when there is confusion about which factors lenders consider. Lenders use information contained in your credit report to evaluate whether or not you are granted credit. Therefore, it is essential to understand what is in your credit file. If you have credit blemishes, it is equally important to know what you can and cannot do to improve your credit file.
What is a credit report/file?
A record of activity that reveals how much debt was incurred, maintained or repaid.
What is in a credit report?
The credit file contains four types of information:
Identification Section
Name, address (cur-rent and previous), birth date, Social Security Number, employer (current and previous) and spouse’s information. Each Credit Reporting agency may report information differently, which could result in variations to identifying information.
Public Records Section
Accounts turned over to collection agencies, bankruptcies, garnishments, tax liens or judgments. This information will impact a credit rating negatively.
Credit Summary Section
Overall number of credit accounts and loans held over the last seven years including active, inactive, and closed accounts. This section also includes the company name, partial account number, type, date opened, credit limit or loan amount, balance owed as of the date the report was pulled, date reported and any delinquencies or comments.
