A credit report is a record statement that has information about an individual’s credit history derived from numerous sources, including banks, credit card companies, collection agencies, and governments. This report is prepared by the credit bureaus. It is created when an individual applies for credit or borrows money for the first time from bank and other financial institutions. Lenders send regular updates of the borrower’s payment history to the credit reporting agencies. In this way, credit bureaus collect an individual’s financial information and create credit reports based on that information.
The report mainly includes summary of credit history such as the type of bank or credit card accounts along with the numbers, detailed account information – related to balances, credit limits, account opening dates, and their standing condition – whether they are past due or in good standing. Various lenders use this report along with other necessary details to determine an individual’s creditworthiness.
A credit report may include the following information about an individual:
• Name and age
• Place of work and the job title
• Current as well as previous place of residence
• Education and work qualifications
• Salary
• Social Security number
A credit report may also include the following information about an individual’s family:
• Partner’s name and age
• Individual’s marital status or common-law relationship
• Number of children or dependents
Furthermore, a credit report may also include information about the things an individual own and owe:
• What the individual owns, such as – house or car
• Whether the individual has paid the bills on time, late or not paid at all
• Debts, such as car loan, house loan, credit card balances
• Regular living expenses, such as rent or mortgage payments
Credit report is one of the primary tools that credit grantors or lenders, like banks, credit card companies, and landlords, use to decide whether to grant credit or rent a house to an individual.
Interestingly, the three major credit bureaus in North America – Equifax, Experian, and TransUnion – are each required to provide consumers with one free report each year.
