Important Information About Your Credit Report

Credit reports contain important information about your credit-related activity. Creditors and debt collectors regularly provide information to the three major credit bureaus -- TransUnion, Experian and Equifax. Credit bureaus regularly share the information with your creditors and with other lenders when you apply for credit. A lender's credit decision is based in large part on information listed in the report, although other factors are considered as well. Potential employers may also review your credit report during the hiring process or make periodic checks while you are employed. Executives and employees in sensitive positions handling money are most likely to receive regular credit checks.

Negative Information

Negative credit information such as late payments and charge-offs remains on credit reports for at least seven years, with bankruptcy information reported for 10 years. The Federal Trade Commission (FTC) reports that the information cannot be removed sooner, although creditors and debt collectors are allowed to make corrections or changes to information they provided to the credit bureaus. Some debt collectors may agree to remove negative information from credit reports in exchange for payments. However, the process, called "pay for delete," is not common. Generally all your credit accounts are listed on credit reports with detailed information about credit limits, type of loan, balances and minimum monthly payments.

Court Records

Public record information from state and country courts, such as monetary judgments and tax liens, also appears on credit reports. Credit bureaus purchase court records through a third party and add the information on reports. Judgments are a legal decision ordering someone to pay money. Credit card lawsuits often result in judgments, although settlements out of court are possible. Debts resolved through settlement typically are listed on credit reports as "paid for less than the full amount owed," according to "Black Enterprise" magazine.

Inquiries

Credit reports also include a list of companies requesting your credit report. There are two types of inquiries. So-called "hard" inquiries are initiated when you apply for credit and authorize the creditor to review your credit file. Excessive hard credit inquiries may result in a drop in credit score, because creditors fear you are loading up on credit for a spending spree or because you are desperate for funds. "Soft" credit inquiries occur when a current creditor or employer reviews your credit or when other lenders scan your report to consider you for "pre-approved" credit offers or when you check your own credit report. Soft inquiries do not affect credit scores.

Other Information

Certain identifying information also appears on credit reports, including your full name and current and previous addresses. Current and past employers are also included, if applicable. Similar information on your spouse is included if you have joint credit accounts.

Free Reports

The Fair Credit Reporting Act allows free access to your credit reports once a year from each of the three credit reporting bureaus. Free copies of the reports are available through AnnualCreditReport.com. The website is endorsed by the Federal Trade Commission and allows printing of credit reports. Viewing the reports online or ordering by telephone is also allowed.