A credit report contains information about who your creditors are, the history of those accounts, and your payments to creditors. The top of your credit report lists your name, the date, and a report number. This report number is important if you need to dispute any of the items on your credit report. A summary, or table of contents, is also included at the top of the report.
The list of credit accounts begins with accounts reporting information considered to be negative. Accounts in good standing appear second on the report. Each entry includes the creditor’s name, address, contact phone number, and a partial account number for identification. Each creditor reports the date when they opened the account, the date they first reported the account to the credit bureaus, and the date when they last updated the account status with the credit bureau.
Credit reports also present the type of credit account (revolving or installment) and may report the terms and monthly payment on the account. Revolving credit involves a credit line that can be accessed over time but does not have an associated end date or term. Credit cards are a common example of revolving credit. Installment accounts have a fixed length of time in which they must be repaid. Mortgages, car loans, and student loans are all examples of installment accounts.
Revolving credit accounts report the credit limit, and installment accounts report the original loan balance. The high account balance and current account balance may be reported, but creditors are not required to enter information in these fields. Additionally, the account is distinguished as an individual or joint account, and the creditor can report a current status along with a “creditor’s statement”. A current status indicates if the account is open or closed. Where the account is reported closed, there is a note about whether the borrower or creditor initiated the closure. While a borrower closing a credit account can negatively impact a credit score, account closures initiated by lenders do not have the same effect. In addition, a creditor statement may be added saying that the balance transferred to a new lender. A borrower wishing to dispute a claim or add their own statement regarding the status of an account can do so by contacting the credit reporting agencies.
Payment History and Collections Accounts
Rows of colored boxes appear under the account information. The boxes are labeled with a month and year of the report from the creditor to the credit bureau. The most recent report is in the first box and subsequent boxes go backward in time. A green box indicates a current account with the borrower making payments as expected. A yellow box indicates that payments are past due. The number inside the yellow box indicates how far behind the payments are. For example, a yellow box with the number 30 shows that the borrower is at least 30 days late making a payment. A red box indicates a severe problem with a borrower. These are accounts that are over 180 days past due and may be in foreclosure or some other form of collections proceeding. A black box indicates that the creditor has not reported any information on the account. Accounts that have been closed may continue to appear on the credit report with black boxes for recent payment data.
In addition to revolving credit and installment accounts, public records related to an individual’s finances appear on a credit report. These public records include actions such as civil court claims, tax liens, judgments, foreclosures, and bankruptcies. The entry lists the relevant parties in the claim, the date of the claim, the amount of money involved in the claim, and whether the financial claim is paid and resolved.
Expiration of Reported Data
Positive or neutral credit information can remain on a credit report indefinitely. Each of the three credit reporting agencies has its own practices and policies regarding how long older information gets reported and when to remove older, inactive accounts. So, it is possible to find different information and accounts on credit reports generated by each of the credit reporting agencies. There are laws in place, however, that govern how long negative information can remain on a credit report. Chapter 7 bankruptcy claims remain on a credit report for ten years after the filing date. Unpaid tax liens can remain on a credit report indefinitely, but paid tax liens get removed seven years after the filing date. Student loan defaults also remain on a credit report indefinitely. Collection accounts can remain on a credit report for seven years plus 180 days from the date that a borrower fell behind on payments to the original creditor. After this time the collection account must be removed from the credit report even if the borrower never made the payment.
Finally, the credit report includes a section with personal information about the borrower. The borrower’s name, social security number, known current and past addresses, and employer may all appear on the credit report. Although this section is often ignored, it is just as important to check the accuracy of this information. Erroneous personal information could be a sign of fraud or identity theft.
Just remember, you actually have three credit reports, as the data collected by TransUnion, Equifax and Experian may vary to some extent.
One you reviewed you credit report(s), you will know both:
- What steps you need to take to repair your credit; and
- What, if anything, needs to be corrected.
Get Your Free Annual Credit Report (Editor’s Note: Does not include your credit score.)