If you’re unsure about what you’ll find in your credit report, you aren’t alone. In fact, over 35% of people don’t even know their credit score.
With a poor credit report and score, you’ll have a hard time moving forward financially in life. Having a poor credit history could prevent you from getting a mortgage, securing a car loan, or even getting a credit card.
Looking to improve your finances? Keep reading to learn more about a credit report, including what is included in a credit report.
What Is a Credit Report?
In simple terms, a credit report is like a report card on your financial history.
Everything you do financially that involves debit or credit is tracked in detail. These details are all collected by credit report bureaus and summarized in one document — your credit report.
Based on your credit report details, you will receive a credit score. Lenders use this score when determining your eligibility for loans, mortgages, and credit cards.
Want to learn more about the difference between a credit report and a credit score? Read this guide.
What Is Included in a Credit Report?
By understanding what is in a credit report, you’ll have a better idea of what credit score you can expect. You’ll also know the steps you can take to improve your credit score in the future.
A credit report will include a lot of information, so it can be intimidating to understand at first. Start by learning the different categories included in a credit report, then look at your own and see where you stand.
Here are the categories of what information is in a credit report.
Your Personal Information
To ensure that everyone’s credit report is accurate, the document will include a decent amount of personal information. The information is similar to the information collected if you were to apply for a new loan.
For starters, the credit report will include your name and any other aliases you may go by. From there, it will include past and current addresses along with past and current employers.
The credit report will also include your social security number and date of birth.
Installment Loans and Revolving Accounts
The two main things that you’ll see on are all your installment loans and revolving accounts.
Installment loans are a one-time loan that involves a set, monthly payment. Once you’ve repaid the loan, the account closes. Examples of installment loans include mortgages, car loans, and personal loans.
Revolving accounts are accounts that can borrow from again and again until you reach a limit or close the account. The most common form of a revolving loan is a credit card. The balance on your account will fluctuate depending on the purchases and payments you make.
While the majority of the accounts listed will be open and active accounts, some closed accounts will also appear. If the account has been closed for less than 10 years, expect it to appear on your report.
With each installment loan and revolving account, you’ll find a complete payment history.
For each month that the account has been open, it will list whether a payment was on-time, late, or missed.
An account with a full payment history of on-time payments will benefit your credit score. Late payments will hurt your score and you should avoid missed payments at all costs.
While the majority of the accounts listed will be open and active accounts, some closed accounts will also appear. If you closed the account less than 10 years ago, expect it to appear on your report.
Credit Inquiries and Loan Applications
Wondering, “what other information is included in my credit report?”. You may be surprised to discover that the information is not limited to your active accounts.
Instead, anytime a credit inquiry is made or you apply for a loan, this will also appear on your credit report — regardless of what came out of the inquiry or application.
For example, if you’re searching for the best interest rate for a credit card, you don’t want to go and apply for five different cards. If you do this, you’ll have five new credit inquiries on your account.
Instead, ask them to do a soft credit check, as this won’t appear on your credit report.
You need to be strategic about what you apply for when it comes to your credit.
Anything that is public record and impacts your finances will also appear on your credit report.
When most people think of public records, they think of criminal records. But, there are many financial decisions you can make that are included in public records. This means that anyone can find the information if they know where to look, and credit bureaus gather this information and attach it to your credit report.
Public records include things like bankruptcies, foreclosures, judgments, tax liens, and repossessions.
All of these things are detrimental to your financial future. To get to this point, you likely became extremely delinquent on your accounts. Instead of just appearing as missed payments, public records more negatively impact your report and score.
Want to Improve Your Credit Report?
Now that you know what is included in a credit report, it’s time to strengthen yours.
Once you’ve reviewed your credit report, you can dispute any information that is inaccurate. From there, concentrate on making all of your payments on time. Also, try to increase your credit limits to bolster your credit utilization ratio.
Want to learn more? Head to the Finances section of this site for more great information.