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Ultimate Guide to Credit Reports

Obtaining and reading your credit report is vital to your overall financial health – it provides you with your credit score and could impact the rates you could get on a loan; for example, the interest rate on your mortgage. It may also affect whether or not you can get a specific job. The process of reading your credit report can be intimidating, but here’s a short guide on the basics to help you get you started. 

What is a credit report?

According to the Consumer Financial Protection Bureau (CFPB), a credit report is “a statement that has information about your credit activity and current credit situation such as loan paying history and the status of your credit accounts.” In other words, a credit report is a breakdown of how you have managed your credit and debt. 

Credit reports are prepared by credit bureaus, which aggregate financial data from companies like credit card companies, mortgage lenders and personal loan lenders. 

Credit reports do not actually contain credit scores. What they do contain is a list of your credit accounts, any credit inquiries and public records like bankruptcies, any overdue debts in collections and civil judgments. 

  • Credit accounts may include credit cards, mortgage loans and auto loans. In your credit report, the lenders for each account will detail the date you opened the account, the amount owed or your credit limit, the account balance and your on-time and late payment history. 
  • The credit inquiries section will include all instances of hard and soft inquiries into your credit report, along with the name of the company that requested them. 

Heads up: With a couple of exceptions, only you can view the soft inquiries into your credit report. You and any lenders you’ve applied for credit from can view the hard inquiries

  • The public records section includes finance related records that are also on file with a local, county, state or Federal court because a creditor has taken legal action against you. Examples can include bankruptcy, tax liens, foreclosures and repossessions. 

How to get your credit report

Thanks to the Fair Credit Reporting Act, you can receive a free credit report from AnnualCreditReport.com every year. You’ll receive a report from each of the three credit reporting agencies, TransUnion, Experian and Equifax. To get your report, you’ll need to provide your name, address, social security number and date of birth so the agencies can identify you. 

You can also get a free copy of your credit report if you’ve been denied credit because of your credit history, but you have to request the report within 60 days of getting declined. If you’ve been denied credit because of your credit history or what the lender reviewed on your credit report, you’ll most likely receive an adverse action letter. This letter will list which credit bureau you can contact to obtain a free credit report. 

If you received all of your free credit reports, you can pay for additional ones from each credit reporting agency individually. You should be able to reach out to the agencies online, by mail or by phone. 

Heads up: There are several fake and “imposter” websites that may pose as credit report resources to overcharge you for credit reports or steal your personal information. Always double check your browser address bar to make sure you’re on the correct website with a secure connection.  

How to read credit reports

Here’s a list of a few things you should look for and verify in your credit report. 

  • Review and verify the list of credit accounts. Make sure every account listed is one you actually opened (or closed). If you see credit accounts you don’t recognize, reach out to the company to get more information and to the credit reporting agency to dispute the error. 
  • Review each credit account’s balance and standing. You’ll want to make sure your accounts are up to date and your credit utilization ratio is accurate, especially before a major purchase like a car or house. 

Who can access your credit reports? 

Some people mistakenly believe that access to their credit report is restricted to lenders and banks. But information on your past debt and payment history reaches farther and wider than that. Let’s say there was a recent college graduate named Nathan, who just accepted a new job with a great salary. He’s now planning to rent his first apartment and lease a new car. But in the background of all this upward momentum, his credit report is playing a vital role in ways he might not realize. 

There are many different instances where your credit report might be accessed and not all relate to borrowing money. Your credit score can affect important parts of your life, such as your apartment or your job.  

Who can see your credit report?  

1. Employers. Yes, Nathan’s future employer, after receiving his consent, can request to get information on his credit report. Why? Often a credit report is part of an employment background check. 

Heads up: The good news is that an employer has to ask your permission to access your credit report. 

2. Landlords. Nathan’s potential landlord might look at his credit report to decide whether he would make a good tenant. The credit check might be done through the apartment’s broker, which is done with the tenant’s knowledge and consent – and often at the tenant’s expense. When applying for a new apartment, your credit report can be very influential. Given two potential tenants with similar incomes, a landlord may choose the applicant with the better credit report, regardless of who applied first.   

Heads up: You can request a copy of your credit report from any consumer reporting agency – often for free. Having your report allows you to know what your landlord will see. 

3. Insurance companies. As Nathan is test-driving sedans, auto insurance companies may be obtaining information from his credit report and price the policies based on this information. A low credit score could lead to higher premiums, while a good credit score could lead to lower premiums. 

Heads up: Not all states allow insurance companies to use credit reports to price coverage.  

In Nathan’s story, we see three sources – a future employer, potential landlord and auto insurance company checking his credit report. In reality, even utility companies or government agencies can request access to your credit report.

The big takeaway: A credit report is the most important and detailed summary of your credit history. A good credit report can make all the difference in your financial trajectory.

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This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.