Credit Report

What Is a Credit Report?

A credit report is a file that summarizes a person's borrowing and repayment history. It is compiled by credit bureaus, companies that gather information from banks, card issuers, lenders, and collection agencies. In the United States, the three major nationwide consumer bureaus are Equifax, Experian, and TransUnion. Each keeps its own file, so reports for the same person can differ somewhat.

A typical report lists:

• Credit accounts that have been opened, such as credit cards, mortgages, auto loans, and student loans
• Payment history for each account, including any late payments
• Current balances and credit limits
• Collection accounts and certain public records, such as bankruptcies
• Records of recent applications for credit, called credit inquiries

How Reports Are Used

Lenders review credit reports when deciding whether to approve an application and what terms to offer. Balances and limits on revolving accounts feed into the credit utilization ratio, the share of available credit currently in use. The information in a report is also the main input for a credit score, a number that condenses the file into a single figure. Landlords, insurers, and employers may also request reports in some situations, typically with the consumer's permission.

In the United States, the Fair Credit Reporting Act governs how reports are collected, shared, and used. It limits who may access a report and for what purposes, and it gives consumers the right to see what is in their file and to dispute inaccurate information.

Checking Your Report

Reviewing a credit report is a common way to spot errors, accounts that are not yours, or signs of identity theft. In the United States, consumers can obtain free copies from each bureau through the official site AnnualCreditReport.com. Errors can be disputed with the bureau that issued the report and with the company that supplied the information. A credit report does not show income, savings, or total assets, so it describes only one part of a person's finances.