- 1 What is a credit report, and why should I check it regularly?
- 2 Your Experian Credit Report is completely Free. See it now!
- 3 What Information is Included in Your Credit Report
- 4 What is a Collection - Remove Collections From Your Credit Report
- 5 Here's What Your Credit Report Actually Says
What is a credit report, and why should I check it regularly?
A credit report offers vital information about your credit history. The information in your credit report serves as a reference point for financial institutions considering your creditworthiness. You should check your personal credit report at least twice a year to make sure that the information is correct.
Your credit report will contain information on whether or not you have missed, or have been late on your payments in the past (and how late you were). It will also provide details such as your current and previous addresses, social security number, any credit card accounts and current balances you may have, as well as past credit card accounts (often referred to as “Revolving Credit”) even if those accounts have been closed or canceled.
This report also lists any auto loans and mortgages (along with balances and how diligent you are about making the payments), or any other sort of loan or credit which you were issued, providing the lender reports the info to the credit bureaus on a regular basis, most of them do. Also, the number of times you have recently applied for credit (credit inquiries) will be available to view as well, along with information on any collections, past due accounts, that sort of thing.
Identity theft is one of the fastest-rising white collar crimes in America. It takes an identity thief only a couple of seconds to steal your information and possibly cause damage your credit report. For many people, inaccuracies, unknown accounts, or strange account activity in your credit report is the first sign of identity theft. Checking it on a regular basis is an excellent way to ensure it is 100% accurate, and will help protect you from this damaging crime.
Your credit report should be monitored on a regular basis. If your goal is to protect yourself from identity theft, or to keep a close eye on your report and score to guard against errors on the part of your creditors, checking your credit report once a year is not enough. Personally, I check my credit report and score at least 4 times a year. Examining my credit report at least every few months ensures that no errors slip by causing your overall credit worthiness (or in other words, the way you look to lenders) to decline.
It’s also an excellent idea to check your credit report and credit score right before you make any large purchases (house, car, boat etc.). Doing this ensures that you are informed about what the lender is seeing on your credit report, and there are no surprises in store for you at the dealership, or bank, about your credit worthiness. The better you look to lenders, the better chance you will have of getting those “1.9% interest” or “0% interest” offers, which in the long run can save you a significant amount of money in interest on your purchase!
To find out how to get your free credit score online, check out our page on How to get an absolutely free credit score. For more information about credit scores, be sure to check out our what is a credit score page.
Your Experian Credit Report is completely Free. See it now!
No credit card required. Includes your Free Credit Report updated every 30 days on sign in.
Things you'll see on your Free Experian Credit Report.
This is your payment history and status of all Real Estate, installment, and Revolving Credit Accounts
A credit check by a lender or landlord is called a Hard Inquiry and will show up on your credit report
Potentially Negative Information
This includes loan defaults, late payments, delinquencies, charge-offs, collections, and public records.
What Information is Included in Your Credit Report
Updated on: February 22, 2013
Knowing what information is included in your credit report is vital when it comes to understanding your credit report. A credit report is one of the most essential tools used to determine your individual financial worth.
Your credit report is a thorough and up to date narrative of both your credit activities and your history used by creditors to determine whether you qualify to get a credit card, a car, a rental apartment or even a home loan.
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Information found in your credit report includes:
Your personal information such as your name, social security number, driver’s license, address and employment history.
- Credit History
Your credit history including all your accounts, credit cards, loans, mortgages and any other unpaid expenses.
- Credit Inquiries
Credit inquiries you may have made within the past year.
Delinquent accounts, existing disputes and any information on how these were resolved.
- Credit Score
Although a FICO credit score is not included in your credit report, it is an important assessment tool that lenders use to assess your credit eligibility. A good credit score would range from 680 to 850 while anything below that would be considered bad.
It is important to keep track of your credit score by accessing the free credit report mandated by the Fair Credit Reporting Act (FCRA) or by paying to get one on a monthly basis. The monthly report costs approximately $14 and is worth the cost for anyone who is interested in building and monitoring their credit-worthiness.
If you are trying to build your credit, I highly recommend you keep an eye on your credit report. It becomes much easier to fix errors and track your progress once you know what information is included in your credit report.
What is a Collection - Remove Collections From Your Credit Report
Last Updated: March 17, 2017
If you are like thousands of other consumers, you might have recently pulled your credit report because you wanted to see why your credit score was so low. That was when you noticed there are collections noted. Turns out you missed a few payments because you lost your job and you were tight on money. But how did these accounts turn up now belonging to a collection agency and how can you get them off of your credit report?
A collection account is the term used to describe a person's loan or debt which has been submitted to a collection agency through a creditor. The collection account normally appears on the credit report of that person and will be on that report for seven years. The collection contains information about both the original creditor and the collection agency.
When Does a Debt Go To a Collection Agency?
Typically, credit card debts may be turned over to a collection agency 180 days after the debt is owed. In the case of medical collections, some hospitals turn medical bills over for collections immediately. Collection agencies begin collection efforts right after the account has been written off by the creditor. This debt is not only reported as a collection but it is also being reported by the original creditor as a charge-off. The collection agency reports a new account under their name as a 3rd party collection account.
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Can You Remove a Collection From Your Credit Report?
After this delinquent account went to a collection agency, you probably started getting bombarded with phone calls at all hours of the day. According to the Fair Debt Collection Practices Act, collection agencies are bound by certain rules and regulations on how they can go about collecting on this debt. Read our article on Collection Agency Harassment - What Are Your Rights to see if you have grounds to file a complaint.
But, let's say you have talked to the collection agency and they are willing to work with you on paying off this collection account. When it is paid in full, the new status on your credit report will be "Paid Collection." This collection will remain on your credit report for seven years which does not help your credit score. The impact on your score does lessen as time passes but it will be seven years until it comes off your report.
Helpful Tips Regarding Collections
Throughout this website, there are numerous articles regarding collections and collection agencies. Our best advice is to pay your bills on time and avoid an account from going into collections. But we know there are circumstances beyond your control and sometimes you have no choice but to let an account become seriously delinquent. If this happens to you, fear not, we have a lot of great articles to help you get through this difficult time. Such as:
- Dealing with Collection Agencies - Using debt validation as a way to remove a collection.
- Five Methods of Dealing With Collections - We have five methods for you to use when dealing with collection agencies.
- Pay for a Delete - Removing a collection from your report by paying it off.
- What Are My Rights Regarding Collection Agencies? - Learn what collection agencies can and can not do when trying to collect on a debt.
Here's What Your Credit Report Actually Says
When you're trying to build your credit - or just being vigilant about avoiding identity theft- it's important to check your credit report regularly.
Each of the three nationwide credit reporting agencies (Experian, Equifax, TransUnion) will provide you with free credit report once every 12 months, upon request. But when you receive that credit report, it isn't always easy to know what to look for or what to do if you believe the report contains incorrect information. Let's break it down.
Credit Report, Credit Score - What's the Difference?
While the credit score may be the most talked-about item on your credit report, the credit report is bigger than just a numerical rating. (And it's important to note: Your score is not included in the free report. However, you can order it through the same website, which is the only one authorized by federal law, for a fee.)
The credit report itself is "a detailed listing of all your debts and payments, going back through your entire payment history," says Kevin Gallegos, vice president of Phoenix operations for Freedom Financial Network. "For each credit account you have, the report shows creditors' names, the amount owed, the highest balance owed, available credit, whether the account is open or closed (and who closed it), the number of times a payment was past due and whether the account is in default."
- Identifying information. This is where you'll find your name, address, date of birth, Social Security number and aliases. Gallegos recommends reviewing this information carefully to be sure it is accurate. "If it is not, you could be held responsible for debts that are not yours," he says.
- Creditor information. Usually the longest section, this is a list of every credit account you have had, with information about the lender, how much you owe, whether the account is current or past due, whether it is open or closed and other status information. Review it to make sure each account belongs to you and that all information is accurate.
- Collection accounts. This section will list any accounts in collection. If your report shows some, make sure it is accurate. "Contact collectors to be sure the debt is yours," Gallegos says. "If so, work to repay it as soon as possible. Then ask the agency to send a letter to you and the credit bureaus stating the debt has been paid. If a debt is not yours, ask the collection agency to send a letter stating that information to you and to the credit bureau."
- Public records. Here, you'll find information about public financial records such as bankruptcy judgments, liens and overdue child support. Again, review for accuracy - serious financial problems and bankruptcy filings could remain here for seven to 10 years.
- Inquiry section. This is a list of businesses that have reviewed your credit report. "If you see unfamiliar names, contact them to find out why they were reviewing your credit," Gallegos says.
What's Included in My Credit Score?
In most cases, the credit score you order (again, for a fee) will be your FICO score, named for the company that developed it in 1989. Each of the credit bureaus may include different information in their calculations, so your FICO score can vary depending on which credit bureau provides the score. While the exact formula used to determine a FICO score is protected, FICO discloses some of the basic categories that affect a person's score. For instance:
- Payment history. Late payments on bills, such as a mortgage, credit card or car loan, will cause a FICO score to drop, while bills paid on time will improve a score. This category accounts for 35 percent of a score.
- Amounts owed. If you owe a high percentage of your available credit on a credit card, for instance, you may appear to be overextended and at risk of late payment or nonpayment. If you have a history of small balances and not missing payments, that will improve your score. This category accounts for 30 percent of a FICO score.
- Length of credit history. Accounting for 15 percent of your score, this category looks at how long your credit accounts have been established and how long it has been since you used specific accounts.
- Types of credit used. This part of your score, worth 10 percent, looks at your mix of installment, revolving, consumer finance and mortgage loans. You can benefit by having a history of handling different types of credit.
- New credit. The final 10 percent of your score considers how many new credit accounts you have opened in a short period of time. Hard credit inquiries, which occur when you apply for a credit card or loan, can hurt your score, especially if several occur within a short time frame.
The percentages attached to each category can help consumers determine which areas are most important to their score. According to Jeff Taylor, managing partner of Digital Risk, Inc., the most important items in your report are delinquencies and charge-offs, your percentage of revolving credit that is open (e.g. how much debt you owe versus how much credit you have available), and recent credit inquiries. "Delinquencies, especially with the last 12 months, are devastating," Taylor says. "After that, the percent of revolving credit, then inquiries."
What Should I Do If Something Is Wrong on My Credit Report?
If you think you see an error on your report, call the consumer credit bureau that provided the report and state your case. "If there is a material error, the bureau is required to post a fix within 30 days, or the line of credit has to be suppressed until the error is made right," Taylor says.
And, of course, if your score is not where you want it to be, make sure to get and stay current on your bills and make a plan to pay off that revolving debt. (Here's a good place to start.)