Business, Legal & Accounting Glossary
A credit report pulls together information on how much a person has borrowed in the past and how well he has done paying it back in order to let creditors know how much of a risk they would be taking by lending to him.
An account of your credit history, prepared by a credit bureau. A credit report will contain both credit history, such as what you owe to whom and whether you make the payments on time, as well as personal history, such as your former addresses, employment record and lawsuits in which you have been involved. An estimated 50% of all credit reports contain errors, such as accounts that don’t belong to you, incorrect account status or information reported that is older than seven years (ten years in the case of a bankruptcy).
A credit report is a detailed synopsis of information collected about an individual by one of the major credit bureaus. A credit report contains identifying information, nature and payment history of current and past accounts, employment history, a credit score, and other pertinent information such as arrests, lawsuits, and judgements. Anyone who applies for a job or credit in the US has a credit report. By law, credit report users must have the individual’s written consent to obtain the credit report. The Fair Credit Reporting Act (FCRA) regulates practices of credit reporting agencies and credit report users. For instance, the FCRA requires the user to tell the individual which report was used to make a credit decision. The more recent Fair and Accurate Credit Transactions Act (FACTA) further obligates credit bureaus to provide a free copy of the individual’s credit report upon request, as often as every twelve months. Otherwise, a credit report can be obtained for a fee.
Your credit report is compiled to let lenders know your credit history:
It is one source lenders use to determine, basically, whether lending to you would be a wise decision resulting in full, timely payback. Your credit report lets lenders assess your risk and they might use that to determine what interest rate to charge you (a lower one for lower-risk borrowers, of course). Dings remain on your credit report for seven to 10 years. Potential employers can also check your credit report (yup, it’s true).
You actually have three credit reports. The three major nationwide credit bureaus are Equifax, TransUnion, and Experian. They jointly support AnnualCreditReport.com, where you are entitled to request one free copy per year of your credit reports. You have to get one from each bureau because one might have something the others don’t, as your creditors might not report an incident to all three. The Federal Trade Commission’s Bureau of Consumer Protection also provides information on consumers and credit reports.
There are ways to work to correct mistakes that your credit reports may contain.
A report containing detailed information on a person’s credit history, including identifying information, credit accounts and loans, bankruptcies and late payments, and recent inquiries. It can be obtained by prospective lenders with the borrower’s permission, to determine his or her creditworthiness.
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This glossary post was last updated: 22nd November, 2021 | 0 Views.