A Credit Report is a complete collection of financial information, collected by a consumer or business reporting company, about a person or a business entity. This reporting company can provide your information to a third party under certain restricted circumstances. It must also maintain records, or a list, of whoever has requested financial information about you, and whoever has received the information about you that they have in your credit file.
You can request your own credit report. When you have been denied credit, or are unemployed, you can receive a free report from the credit reporting company. You are also entitled to have a free report once yearly from each of the three big credit reporting companies. These are: Equifax, Experian, and Trans Union.
Check your credit report yearly to watch for incorrect information, and to help prevent identity theft when someone else opens credit accounts in your name. You also can pay for credit reports or set up a program for viewing unlimited times, for a fee.
When someone requests a credit file disclosure, it is recorded within your credit report, and can affect your total credit score, (FICO), which can in turn reduce your score. This is generally related to the problem of having too many credit accounts, and then becoming unable to make payments if all accounts are maxed out to their limits.
The FICO score is calculated by a complex mathematical model that few understand. It is used to help third party lenders determine whether or not to extend you more credit. A higher score will result in offers that have lower interest rates. Scores are related to a credit available to credit used ratio also. Credit reports are transmitted electronically or mailed to the recipient. Records go back to certain time periods that vary from seven to ten years. Credit reports also include certain information that is not disclosed to others, such as inquires you receive from companies that are offering pre-approved credit teases, insurance or account reviews, and suppressed medical information.
Business credit reports will summarize a business financial history, and present condition and rating. It will also show any enforceable liens against that entity. Actual reports contain personal data such as name(s) ever used in that time frame up to ten years, all addresses, social security number, and employment history. It shows all credit accounts, whether they are in good standing or overdue, account numbers and lender information, the number of inquiries into this credit history, information on all accounts that have been sent to collections or written off by lenders, garnishments by government, plus information on how you can dispute any information or make corrections.
You are allowed to add your own statement regarding accounts, for example, unable to pay due to divorce or death, etc. It is very hard to remove negative information from your credit report. You have to contact companies, provide proof, and you still may not achieve your objective of removal. Bankruptcy filings remain for ten years, most other information for seven years.
Credit report information is generated when you apply for credit. Updates occur monthly, as payment information is reported by lenders. Frequent moving can be a problem, as address and employer changes are reported, because it may indicate instability. Creditors can check your report, and adjust interest rates if your rating deteriorates. They can sell your information to advertisers. Credit counselors can obtain your records with your permission with no adverse reporting. Potential employers can view credit reports to determine your stability, honesty, financial stress, and so on, so a bad report can affect hiring.