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About Credit Reports

 

Credit reporting agencies maintain files on millions of borrowers. Lenders making credit decisions buy credit reports on their prospects, applicants and customers from the credit reporting agencies.

Your report details your credit history as it has been reported to the credit reporting agency by lenders who have extended credit to you. Your credit report lists what types of credit you use, the length of time your accounts have been open, and whether you've paid your bills on time. It tells lenders how much credit you've used and whether you're seeking new sources of credit. It gives lenders a broader view of your credit history than do other data sources, such as a bank's own customer data.

 

Creating Your Credit Report

Your credit report does not really exist until you or a lender asks for it. It is then compiled by the credit reporting agency based on the information stored in that agency's file. This information is supplied by lenders, by you and by court records.

 

Tens of thousands of credit grantors — retailers, credit card issuers, banks, finance companies, credit unions, etc. — send updates to each of the credit reporting agencies, usually once a month. These updates include information about how their customers use and pay their accounts.

 

Your credit report reveals many aspects of your borrowing activities. All pieces of information should be considered in relationship to other pieces of information. The ability to quickly, fairly and consistently consider all this information is what makes credit scoring so useful.

 

What's In Your Report?

 

Although each credit reporting agency formats and reports this information differently, all credit reports contain basically the same categories of information.

 

  • Identifying Information. Your name, address, Social Security number, date of birth and employment information is used to identify you. These factors are not used in credit scoring. Updates to this information come from information you supply to lenders.
  • Trade Lines. These are your credit accounts. Lenders report on each account you have established with them. They report the type of account (bank card, auto loan, mortgage, etc), the date you opened the account, your credit limit or loan amount, the account balance and your payment history.
  • Credit Inquiries. When you apply for a loan, you authorize your lender to ask for a copy of your credit report. This is how inquiries appear on your credit report. The inquiries section contains a list of everyone who accessed your credit report within the last two years. The report you see lists both "voluntary" inquiries, spurred by your own requests for credit, and "involuntary" inquires, such as when lenders order your report so as to make you a pre-approved credit offer in the mail.
  • Public Record and Collection Items. Credit reporting agencies also collect public record information from state and county courts, and information on overdue debt from collection agencies. Public record information includes bankruptcies, foreclosures, suits, wage attachments, liens and judgments.

 

Credit Inquiries Q&A

 

Q. Will my FICO score drop if I apply for new credit?

Q. What is an "inquiry?"

Q. Does applying for credit affect my FICO score?

Q. How much will credit inquiries affect my score?

Q. Does the formula treat all credit inquiries the same?

Q. What should I know about "rate shopping?"


The information provided by Fair Isaac Corporation is used with permission. Copyright © Fair Isaac Corporation. All rights reserved. Further use, reproduction, or distribution is governed by the Fair Isaac Copyright Usage Requirements, which, along with further information on credit, credit scoring, and related topics, can be found at www.myfico.com. Fair Isaac®, FICO®, myFICO®, and other marks are trademarks of Fair Isaac Corporation.
       
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