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What is a credit report?
By Brett Klasko 
Thursday, October 5, 2006
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Just like in school when you get a report card pointing out both your positives and negatives, a credit report does the same, only with your financial information. And just like in school, your past performance still shows up today – so start out strong. Like the administration in charge of grades in school, three big national credit agencies head up the credit report system: Equifax, TransUnion, and Experian. So what’s in your credit report anyway?
- Personal information (current and previous addresses, social security number, date of birth, and current and previous employers)
- A full history of how you’ve managed your finances (including a month-by-month view of all credit card and loan payments, highlighting late payments, credit limit, high balances, outstanding balances, and date opened)
- Inquiries by businesses to see your credit report (with dates of each request and contact information for each business that made a request)
Surprised by how much information is out there? Remember to stay on top of your bills and you’ll be all right.
All of the information these credit agencies have on file is used to determine your credit score using FICO (Fair Isaac and Co. Credit), the most widely used scoring system. Your credit score is a number between 300 and 850 that helps creditors and lenders determine if they want to let you buy something on credit or open a new credit card. Think of your credit score as your score on the SAT. Colleges don’t care to see what you had for each answer, they just want to see that final score. The same goes for creditors. They will usually just check your credit score as a whole, so aim high.
Below is a list of several factors that can affect your credit scrore:
- Level of revolving debt – these are basically charges that show up bill after bill. By paying your credit cards in full and on time, you will avoid revolving debt. Remember to try to not just pay the minimum.
- Length of time you’ve had the account – the longer the account has been open, the better. This usually hurts young adults since they haven’t been in the game too long.
- Number of delinquencies and how recent they are – every time you are late on a credit card or loan payment, it makes its way on to your credit report. Keep up with your paperwork.
- Number of open accounts – have a manageable number of credit accounts. Too many is considered too risky for most creditors.
- Number of credit inquiries – people who seek several new credit accounts are considered riskier. Companies don’t like to see that several other companies have checked your credit report recently.
Continue on: Why Keeping a Good Credit History is Important
Jeff Samotny contributed to this article.
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