What is a Credit Report?

A credit report consists of four basic parts: Your Personal Details, Credit History, Public Records and Inquiries. Each of these parts provides specific information to those that read them, and while you might not understand the need for all of these, they are looked at carefully by potential lenders.

However, before we go into the details, let’s first of all understand what they are and why they are necessary. So what exactly is a credit report?

In simple terms it is a report of your credit history so that potential lenders can assess the risk of them lending your money. If you have a record of late payments, or even of defaulting on payments, then a potential lender has the right to find that out.

Bad payers tend not to be offered loans or mortgages at the same interest rates as others, although they do get them. So don’t think that because you have a bad credit record that you will never get credit, because that is not correct.

You might fail with your credit card applications, but if you want a loan then that is possible if you have security which will generally be your home. Your home equity is the difference between what you still owe on it and its current market value, and you can borrow up to 100% of that. Credit card applications, however, will involve the card companies or banks checking out your credit record and if that is poor, then irrespective of how much equity you have on your home, you will not get a regular credit card.

Note the word ‘regular’. A poor report will not stop you getting a card, but it will likely have to be prepaid. A prepaid card is one with which you pay money into the card account first, and can then use it for purchases, hotel bills, etc up to the amount that have paid into it. It’s just like a bank debit card. So now that’s out of the way, let’s get back to the report.

Your credit report contains:

• Your full name and current address.


• Previous addresses up to a certain date, dependant on the credit laws of the country you reside in.


• Names of everybody else registered as living at that address.


• Details of all credit cards and loans opened in your name.


• Details of any mail order credit, or any form of credit at all, that you have been offered.


• Your monthly payment record for all of the above. If you have been late with payments it will show.


• A record of every company that has searched your credit file, and all applications for credit that you have made.


• Bankruptcies and court judgments against you pertaining to debt.


• Employment history


• The same information on everybody else registered as living at your address.

There might be more according your country of residence, but these generally appear in just about every credit record world-wide. In the UK, adverse data will disappear after seven years if it has been declared closed by a creditor. That means that the record stays for seven years after you have paid off the debt!

One little known fact is that just about anybody can see your credit report. Although governments claim a degree of security it is a hard fact that anybody that wants to lend you money has access to your report, but not only that: In the USA, the FCRA (Fair Credit Reporting Act) allows creditors, employers, insurers, landlords and any other business requiring your credit details for purposes of employment, insurance, renting a home or credit can access your report. In the UK, just about anybody can by applying online.

In the USA there are three major credit reference agencies: Experian, Equifax and TransUnion, and each is obliged to provide you with a free copy of your report once a year. You have to ask for it, but having asked you must receive it.

So that’s it. Simple. A credit report is basically a report of your credit history. Some are good and some are bad. Those with good credit reports are not really aware of them, and those whose are bad probably worry too much about them. Don’t, because it not worth doing so. The only way to improve your credit rating is to pay everything on time and wait about seven years.

However, there are companies willing to help you out so take advantage of them if you feel that you have to. If you have a need to view your own credit report then your are advised to act now before you forget, because it could make a massive difference, not only to the accuracy of your credit report, but also to your credit score.

Some estimates indicate that up to 90% of credit records are inaccurate, and can harm the subject's credit score. So act now and get it put right.

Leave Credit Report for Home Page