It’s important to regularly check your credit report to make sure you understand what’s going on with your credit and finances. However, once you’ve gotten a copy of your report, it can be hard to make sense of it—credit reports aren’t very user-friendly documents.
Fortunately, the information on your credit report isn’t very complex. It’s relatively easy to interpret once you know what you’re looking at.
Table of Contents
What is a credit report?
Your credit report is a record of how you’ve managed your credit accounts, including whether you’ve made payments on time or late and the balance on your credit cards. The three main nationwide credit bureaus (Equifax, Experian, and TransUnion) collect information about you from your lenders and use this information to make your credit reports.
What information is included in your credit report?
The credit bureaus sometimes differ in how they present your credit history, but your reports always contain the same information. It falls into four categories: 1
- Personal information
- Account information
- Credit inquiries
- Public records
We’ll look at each of those in more detail.
1. Personal information
The bureaus use your personal information to verify that they’re matching your credit accounts with the right person. This information doesn’t have any impact on your credit score.
The personal information that appears on your credit report includes:
- Your name (including nicknames, previous marital names, or spelling variations that have appeared on previous credit applications)
- The name of your spouse and loan co-applicants or cosigners
- Your Social Security number
- Your date of birth
- Your phone numbers
- Your current and previous addresses
- The names of your current and previous employers
2. Account information
The accounts section of your credit report contains the following information:
- Your open credit accounts, including revolving accounts (e.g., credit cards) and installment accounts (which are loans you pay back in fixed amounts like mortgages, personal, student, and car loans)
- Credit accounts that you closed in the last 7–10 years
- The names of your lenders
- The opened/closed dates for each credit account
- The payment history of each account (i.e., whether you’ve always paid on time or have any late payments)
- Your credit limit (for credit cards) or how much you borrowed (for installment loans)
- Your current balances
How collection accounts appear in your account information
In addition to accounts that you opened yourself, accounts opened by debt collection agencies can also appear on your credit report. These are known as collection accounts.
If you have a collection account on your credit report, it means that you failed to pay a debt for a prolonged period, and your creditor charged it off and sold or transferred it to a debt collector.
In addition to credit accounts that were already being reported to the bureaus, other accounts that you owed and did not pay can appear as collection items on your credit report and hurt your credit:
- Unpaid utility bills
- Unpaid medical bills
Like most other derogatory items, collections stay on your credit report for 7 years. 2
What to do if you don’t recognize an account on your credit report
If you don’t recognize the name of a company listed on your credit report, then don’t panic—it’s possible that your creditor is reporting your account information under a name that you’re not familiar with.
However, if you’re sure that the account isn’t yours, it could be a credit reporting error or a sign of identity theft. Contact the listed creditor to get more information.
If you suspect fraud, then immediately take the following steps to protect your credit:
- File a report with the Federal Trade Commission at IdentityTheft.gov.
- Place a fraud alert and credit freeze on your reports.
- Dispute the information on your credit report by sending a dispute letter to the bureau that published the account. To create your letter, use a credit dispute letter template.
The bureaus also record every time someone checks your credit. These checks appear on your credit report as either:
- Hard inquiries: These are credit checks that lenders conduct when you fill out a formal credit application (such as for a loan or credit card). Hard inquiries take a few points off your credit score, although this effect only lasts for a few months.
- Soft inquiries: These credit checks are unrelated to credit applications and don’t have any affect on your credit. If you check your own credit, your employer checks it as part of a background check, or a lender runs your credit to see if you prequalify for a credit card, it will be a soft inquiry.
4. Public records
Before 2018, credit reports contained several types of public records, including bankruptcies, court judgments, and tax liens.
Now, however, bankruptcies are the only public records that can appear on your credit report. 3
How bankruptcies appear on your credit report
When you declare bankruptcy, your report will show the following information:
- The name of the court where you filed for bankruptcy
- The bankruptcy chapter you filed under (chapter 7 or chapter 13 bankruptcy)
- The filing date
- Reference number
- Your statement about the bankruptcy
How long a bankruptcy will stay on your credit report depends on the type it is. Chapter 7 bankruptcies remain for 10 years, whereas chapter 13 bankruptcies fall off after the normal 7 years 2
What is your credit report used for?
Individuals and businesses use credit reports for assessing an individual’s risk.
They may check your credit report when you apply for any of the following:
- A loan or credit card: Before a lender approves your application, they’ll usually check your credit to determine how likely you are to repay the debt. If your credit history suggests that you’re a reliable borrower, lenders are more likely to approve your credit applications. Another benefit of having good credit is that you’ll be offered lower interest rates or larger amounts of money to borrow.
- An apartment: Landlords check your credit report to determine how likely you are to pay your rent on time. Although there’s no universal minimum credit score required to rent an apartment, some landlords might reject your rental application if you have too many negative marks on your credit report.
- A job: Around 16% of employers run credit checks on all candidates. If there’s evidence on your credit report that you’re unreliable, it can stop you from getting a job. 5
- Utilities: Utility contractors also sometimes perform credit checks to assess the risk that customers will fail to pay their bills. If you don’t have a good credit score, you may be required to pay a security deposit.
- Insurance: Insurance providers often run credit checks because they believe your creditworthiness is an indicator of how likely you are to file an insurance claim.
Why do your credit reports contain different information?
Don’t be alarmed if you notice that you have slightly different credit reports. Creditors may only report to one or two of the major credit bureaus (or even none at all), so your credit reports may contain information for different accounts. Because your credit score is based on the information in your credit report, you may also have different credit scores.
If you’re unsure who your creditors are reporting your account information to, try contacting them and asking.