What is a Credit Report?
A credit report is a summary of past financial behavior, with a particular focus on your history of payments on contracts (such as mortgages and car loans) and credit-related transactions (such as credit cards). The report also indicates any judgments against you, any bankruptcies, mechanics liens and other matters of public record
Credit reports usually do not include information such as prompt payments of rent, medical bills, utilities, alimony, child support and taxes. However, these reports do reflect any delinquencies in these payments.
There is no legal requirement for creditors and other institutions to report to the credit bureaus. This means that unfortunately, not every timely payment you make will appear on your credit report.
Who can get a credit report?
Be aware that under the Fair Credit Reporting Act, many others besides you may be able to legally get your credit report, even without your express permission as long as they indicate a legitimate business reason. This includes banks, other lenders, landlords, utilities, etc. Also, a court can obtain your credit report with or without your permission.
What is a Credit Score?
A credit score (also known as a FICO Score) is a number lenders use to help them decide: "If I give this person a loan or credit card, how likely it is that I will get paid back on time?" A score is a snapshot of your credit risk at a particular point in time.
How does it help you?
Credit scores give lenders a fast, objective measurement of your credit risk.
Scores can be delivered quickly and can speed up loan approvals. Older credit problems count for less.
How fast does my score change? How can I improve my credit score?
Your score can change whenever you run a credit report. Bankruptcies and late payments can lower your score fast, BUT improving your credit score takes time.
Tips for raising your score
- Pay your bills on time
- If you have missed payments, get current and stay current
- Be aware that paying off a collection account or closing an account which was delinquent will not necessarily improve your credit score.
- If you are having trouble making ends meet, contact your creditors or see a reputable credit counselor (this will not improve your score immediately, but will show you are managing your account and your score will increase over time.)
Note: People with no credit cards tend to be a higher risk than people who have managed credit cards responsibly.
Check your Credit report
Under the new Fair and Accurate Credit Transactions Act (FACTA), gradually all Americans will be permitted to have a free credit report each year from each of the three credit bureaus. Currently (Spring 2005) the west coast is benefiting from this new law. The east coast is due to be benefit from this law by the fall of 2005. Please go to www.annualcreditreport.com or call 1.877.322.8228 for more information.
You can also contact each of the three credit reporting agencies at:
Equifax: (800) 685-1111 or
Experian: (888) 397-3742 or
TransUnion: (800) 888-4213
Your credit report/scores may be different, depending on which credit bureau you get the report from. This is because creditors are not required to report information to the bureaus. Most larger ones do, but are not required to. That is why it is important to check with all three credit bureaus.
Be aware that under the Fair Credit Reporting Act, many others besides you may be able to legally obtain your credit report, even without your express permission, as long as they indicate a "legitimate business reason." This includes banks, other lenders, landlords, utilities, etc. Also, a court can obtain your credit report with or without your permission.
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