Your credit score is one of the most important numbers to your personal finances regardless of whether you know your score or not. Individuals can order one credit report for free each year from each of the three major credit reporting agencies, Experian, Equifax and TransUnion. A credit report is a record of your credit activities.
Personal Information
Credit reports contain personal identifying information such as your name, previous names, address and previous addresses. The personal information included in a credit report is compiled from credit applications you have filled out, so information may also include your Social Security number and birth date as well as information about your current and previous employers. Lenders can use personal information to help determine whether a potential borrower has a steady job and living situation.
Credit Information
A major component of your credit report is a list of credit information and events. The credit information includes all of your credit cards accounts and other loans such as student loans, mortgages, auto loans and personal loans. The report includes the amount of the loans, your credit card limits and your recent payment history on your debts. Lenders use credit information to assess how risky it is to lend you money. For instance, if you carry a high amount of debt and have missed payments recently, it may be harder for you to get a loan.
Requests for Credit
A credit report includes a list of recent requests that you have made for new credit accounts. The three credit reporting agencies also record inquiries whenever your report is shown to some other party, such as a lender, insurance agent, landlord or other type of service provider. These types of inquiries typically remain on your credit report for up to two years. If you have made many recent inquiries for credit and have opened new credit accounts recently, it may lower your credit score.
Public Information
Credit reports include relevant public information related to your finances. Information typically includes any state and county court records on bankruptcy, tax liens or monetary judgments. Overdue child support can also be listed on a credit report.
Credit Score
A credit score--also called a FICO score or credit rating--is a number calculated from the various information included in a credit report that signifies the risk you pose to lenders. Lenders use credit scores to decide whether to issue loans and what interest rates to charge.
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