Many people believe that credit reports set your credit score or determine whether or not you can get a loan. However, while credit reports are used to make these determinations, it is not what a credit report declares. Credit reports are a listing of your credit history, including accounts, credit limits, overdue amounts and other information relating to your use of credit.
What Reporting Agencies Do
Credit reporting agencies aren't in the business to make a determination of credit worthiness. They are information gatherers. They collect the information, which is then available to lenders, landlords, service providers and others to use on deciding whether to extend you credit. The information is collected from lenders, public records and collection items. The service that credit reporting agencies provide allows you to get credit quickly at a fair rate.
Information Included
Your personal information, such as your name, address, Social Security number, birth date and a list of past and present employers, is part of the report. It allows credit information to be filed with the correct person, but it can also show whether you jump from job to job, keeping each for a short time. Most of the report is your credit history, a listing of the credit accounts you have opened in your name and the accounts' details, such as credit limits, dates opened, balances and whether you make your payments on time. Closed or inactive accounts will stay on your report for seven to 11 years after they are closed (depending on how they were paid). A listing of the number of inquiries made into your account for the previous two years will be listed, and any public records information that might affect credit, such as bankruptcies, overdue child support and liens, will also be included. These are the things a credit report declares.
What Is Not Included
Bank accounts, investments, old bankruptcies and old debt collections are not listed. Also, personal information that could lead to bias, such as gender, religion and ethnicity, are not part of the report. Medical history and criminal history are not included either. You also will not find anything declaring whether you should be given credit or not.
Who Can View Your Report
Someone must have a valid reason to view your credit report. Potential lenders, landlords and insurance companies have reasons to view your report because they need to see if it presents them with any red flags as to why you should not be given credit. Because it is only a report and not a declaration of credit worthiness, different organizations may reach different conclusions about what the same report tells them. Besides an organization with a permissible reason for viewing your report, you can grant written permission to someone to view your report.
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