It seems odd to know that when you meet with a bank, that encounter will go on a report with many other financial transactions. But lenders willingly share information because it protects the whole credit industry from people who don't pay their loans. With information provided regularly by creditors, credit agencies can almost instantly create a financial profile for most consumers.
How it Gets There
According to My Fico, a website produced by the Fair Isaac Co. that developed the matrix used for credit scores, lenders compile information on all their customers and how they handle their debts. Banks, for example, keep track of all their mortgage customers, auto customers and other installment or business loan customers. Regularly, usually once a month, they give this information to the credit agencies. Credit agencies don't keep a file on each person, rather they create a credit report when you or a lender ask for it. Then they cull all the information that's been given about you as well as any inquiries that have been made about you.
Accounts in Good Standing
When you have a credit account, the credit reporting agency lists when you opened the account, what type of loan it is, the original balance and the outstanding balance, the monthly payment, whether it is an individual or joint account, and the status of the account. Status might say that the account is still open and there are no late payments. If you closed it, there may be a note mentioning that the account was closed at the customer's request.
Potentially Negative Items
If there has been a court case against you because of a credit issue, the plaintiff in the case will be listed, along with the court where the case was heard, the claim amount, and the date the claim was resolved. With negative accounts in collections, the entry will say who the creditor is, the amount owed, and the date it became past due. With other accounts with blemishes, the creditor will list the date and number of days the payment was late, whether 30, 60, 90 or more; tell that the account was in collection or say that the account was closed.
Account Inquiries
If you initiate a loan action -- meaning apply for a loan, credit card or mortgage -- and the company to which you made application then requests a copy of your credit report, the bureau will list that inquiry on your credit report. It will give the name of the organization, the date of the request and the status. If, however, another company --seeking to offer you credit or for some other reason -- initiates a report, those entries will not appear so that other creditors can see them. But if you ask for a copy of your report, those will appear on your copy.
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