There are credit profiles maintained for businesses as well as individuals. When you apply for credit with a bank or lender, a credit profile begins to form with the credit bureau used to inquire about your credit. A credit profile includes your personal identifying information, employment information, credit information, inquiries and public record information, according to the website Mortgage 101.
Identification
To form a new credit profile you must apply with a lender, or someone has to pull your credit report. If you previously had credit, you have an established profile. When you have no approved credit, the only thing on your credit profile will be your name, address, Social Security number, date of birth, and place of employment. You will also have an inquiry. Every lender that looks at your credit file leaves an inquiry.
Trade Lines
When you gain approval for a loan or some other form of credit, a trade line establishes or forms as part of your credit profile. A trade line consists of the name of the creditor who approved you for credit, the amount of credit extended, the date last paid, the credit limit, the payment history, the type of account, and the credit rating, which describes account payments.
Changes/Updates
Every time you receive approval for a new credit account, that lender will submit information to the credit bureau. The bureau maintains a record of your payments and any changes in your account such as a reduction in the balance or the credit limit. If you have a credit card and make new purchases, that information goes to a credit bureau as well. Changes, to your credit profile, such as a new employer or a new address, update whenever you apply for new credit.
Public Record
If a creditor decides to bring legal action against you because of non-payment on an account, this information will show up on the bottom of your credit profile as a public record; this is a judgment. Bankruptcies are public records, too. Other items that can appear on your credit file as public record include tax liens.
Inquiries/Credit Scores
Inquiries from creditors can reduce your credit score. Lenders use credit scores to determine your credit worthiness; they help lenders estimate the likelihood that you will default on a loan. Credit scores range from 300 to 850. High credit scores help you get more favorable terms and conditions from lenders, such as lower interest rates. Bad credit, such as late payments, judgments, bankruptcies, and collection accounts, will lower your credit score.
Credit Bureaus
Lenders check with one of the three major credit bureaus before approving or denying you credit. The three credit bureaus are Transunion, Experian, and Equifax. You can get a free copy of your credit report, which is a record of your credit profile, from the Annual Credit Report website.
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