Although each credit reporting agency formats and reports this information differently, all credit reports contain basically the same categories of information. Your social security number, date of birth and employment information are used to identify you. These factors are not used in credit scoring. Updates to this information come from information you supply to lenders.
The information that is contained in your credit reports can be categorized into the following groups:
- Personal Information
- Credit History
- Credit Inquiries
- Public Records
Each of your credit reports will contain the following basic pieces of biographical information:
- Name. The name that you use on any financial application (such as credit card, loans, etc.) is that the name that you’ll see on the credit report.
- Date of Birth (DOB).
- Current & Past Addresses. You will see your current address on your credit report and most likely at least one, if not more, of any of your past residences.
- Name of Current & Past Employers. This information will appear if you’ve provided it on any applications that are then sent back to the credit bureaus. Employer information doesn’t make any impact on your credit score, however it helps verify the information on your loan or credit card application and depending on your position and history at the company, can help you get a more favorable rate or higher credit spend.
- Social Security Number (SSN).
All of this data is critical for identity thieves, so make sure that once you discard your credit report, that you shred it thoroughly. You should also make sure that all of this information is correct and accurate; if it isn’t, it’s possible that your personal information has been stolen and used by an identity thief.
The second section of your credit report contains report a summary of your credit history which includes the following:
- The number of accounts open (and closed, if applicable) as well as the dates that they were opened (and closed, if applicable).
- The type of accounts (mortgage, installment, revolving or others).
- Credit limit on each account or loan amount (depending on the account).
- Monthly balance as of each statement date.
- List of which accounts are past due as well as those in good standing which includes the monthly payment history of each account and whether or not minimum payments were made on time.
At first glace, you may think that the more accounts that you have open and that are shown to be in good standing, the higher your credit score will be, however that may not necessarily be the case.
Prior to approving your loan and then deciding what your rate will be, the financial institution that is reviewing your credit report, will take a look at all your accounts and assume that you will use all of the available credit on your credit cards and then factor-in the monthly payments that would be required to service that debt.
For example, let’s say that you have ten credit cards, all in good standing with a zero balance. You may not have any problem making payments on a $2,500 monthly mortgage, however the financial institution that’s deciding whether to approve your loan may look at the situation differently. If they factor in your ability to make monthly payments on the ten different credit cards you own in addition to a $2,500 mortgage, your creditworthiness may be diminished.
Also, keep in mind that if you see the presence of any accounts on your credit history that you didn’t open, it may be an indication of credit fraud. In this case, it’s imperative to take the proper measures immediately if you suspect you’re a victim of identity theft. You should contact the credit bureau immediately, as well as your bank, as unpaid balances can adversely impact your credit score.
An inquiry is recorded whenever your credit report is viewed by a third-party, such as a lender, credit card company, landlord, etc. Credit inquiries can remain on your report for up to 2 years.
Hard inquiries are generated each type you give permission to a third-party to request and view a copy of your credit report. These types of inquiries are tracked over a 12-month period and are taken into account when your FICO score is calculated. Too many hard inquiries can result in a dip in your score. An excessive number of hard inquiries can have a negative impact on your score.
Soft inquiries are generated by your current creditors checking on your status, credit card companies looking into you to decide whether they wish to extend an unsolicited offer and you personally checking your own credit. These types of inquires are not seen when a financial institution reviews your credit report, and they have no impact on your credit report.
Public records include any financial proceedings that have gone through the court system. The three main types of public records that you may see on your credit report includes the following:
- Bankruptcies. Chapter 7, 11, and 13 bankruptcies can be listed on your credit reports. Chapter 7 bankruptcies remain on your report for ten years, while all other bankruptcies remain on your report for seven years. The amount of damage that’s done to your credit score depends on the type of bankruptcy, whether or not you adhere to the terms of the bankruptcy, as well as several other factors.
- Tax Liens. A tax lien can be imposed upon you by the court system for any delinquent taxes owed on property, or as a result of failure to pay taxes. If a tax lien has been imposed upon you, it will be reflected on your credit report.
- Civil Judgments. A civil judgement put simple, is a ruling that pertains to non-criminal matters. If a court finds that you owe another party money (for example, child support), this judgement summary will be reflected on your credit report.