What a credit report is
The Consumer Financial Protection Bureau (CFPB) describes a credit report as 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. Credit reporting companies, also called credit bureaus, compile it from information creditors send them. Lenders use it to decide whether to lend and at what rate, and other businesses, insurers, landlords, utility and phone providers, may use it too; an employer may look only if you agree. Because creditors are not required to report to every company, you may have more than one report, and they may differ.
Getting it, free
The free route is AnnualCreditReport.com, the site the three nationwide credit reporting companies, Equifax, Experian and TransUnion, use for the reports the law entitles you to; the CFPB says you can view your reports there once a week, choosing one, two or all three. The same reports are available by phone at 877-322-8228 and by mail with the Annual Credit Report Request Form. You are also entitled to a free report in several other situations the CFPB lists: within 60 days of a notice that you were denied credit, insurance or employment because of the report; when you believe the file is inaccurate because of fraud; after placing a fraud alert; when you are unemployed and intend to apply for work within 60 days; when you receive public assistance; and where state law provides one. The CFPB warns about sites that advertise free reports and then bill you or require a purchase.
The five sections, and what to check
| Section | What it contains (CFPB) | What to look for |
|---|---|---|
| Identifying information | names you have used, current and past addresses, date of birth, Social Security number, phone numbers | Every name and address should be yours. An address you never lived at can be a mix-up with someone else or a sign of fraud. |
| Credit accounts | each account with its type, credit limit or loan amount, balance, payment history, and the dates it was opened and closed | Accounts you do not recognise, balances that are wrong, payments marked late that were on time, and closed accounts shown as open. |
| Collection items | missed payments sent to collection, and overdue child support | Debts you have paid, debts that are not yours, and the same debt listed twice by two collectors. |
| Public records | liens, foreclosures, bankruptcies and judgments | Anything that is not yours, or is older than it should be. |
| Inquiries | companies that have accessed your credit report | Applications for credit you did not make. Inquiries you did not authorise are the earliest sign of identity theft. |
Read the accounts section against your own records: the credit card payoff calculator and the debt-to-income ratio calculator both start from the balances and payments you know, and a report that disagrees with them is the one to question. The debt-to-income figure is what a mortgage lender reads next to the report, and the home affordability calculator shows how the accounts on the report shape the loan you can get.
Why to read all three
Each company has only what was reported to it. An account a creditor sends to one company and not another, an inquiry made against one file, or a fraudulent account opened with a lender that reports to only one of them will appear on one report and be invisible on the other two. The weekly access the CFPB describes makes it practical to rotate: one company's report each week, so every file is seen within the month, or all three at once when you are about to apply for something large.
Disputing an error
The CFPB's process has two addresses. First the credit reporting company that shows the error: explain in writing what you think is wrong and why, include copies, never originals, of the documents that support you, and keep a record; certified mail with a return receipt proves delivery. Second the furnisher, the bank, card issuer, landlord or collector that supplied the information, at the address on the report or the one it specifies for disputes. The clock that follows is set by law:
| What happens | When |
|---|---|
| You dispute with the credit reporting company, in writing, with copies of documents | day 0 |
| The company investigates and forwards the dispute to the furnisher | generally within 30 days of receiving it (up to 45 in some cases, 15 more if you add information) |
| The furnisher investigates and responds | generally within 30 days of receiving the dispute |
| Wrong or unverifiable information is updated or removed and the other companies are notified | at the end of the investigation |
| You are told the results | within five business days of the investigation finishing |
If the furnisher finds the information wrong or cannot verify it, it must update or remove it and notify all the credit reporting companies. If it stands by the information, you can ask the reporting companies to add a statement about your dispute to your file. If none of that resolves the problem, the CFPB takes complaints on its website. A dispute changes the report; it does not, by itself, change what you owe.
A reading routine
- Once a week, one company, from AnnualCreditReport.com; all three before a mortgage, a car loan or a lease application.
- Start with inquiries and new accounts, the first places identity theft shows; the guide credit freeze vs fraud alert covers what to do if you find one.
- Check balances against your statements, and payment history against your own records.
- Dispute in writing, with copies, to both the reporting company and the furnisher, and note the dates.
- Keep the balances low relative to limits while you are at it; the credit utilization ratio is the report's second most important number after payment history.
This guide reports the CFPB's published guidance; the report itself, not the score, is what it describes, and scores are calculated from it by separate companies with their own models.
Frequently asked questions
How do I get my credit report for free?
From AnnualCreditReport.com, by phone at 877-322-8228, or by mail with the request form. The CFPB says you can view your reports from Equifax, Experian and TransUnion once a week there, and you can pick one, two or all three. You also get a free report when you have been denied credit, insurance or employment because of one, if you request it within 60 days of the notice, after placing a fraud alert, if you are unemployed and about to look for work, or if you receive public assistance.
What is in a credit report?
The CFPB lists five kinds of information: identifying details such as names, addresses, date of birth and Social Security number; your credit accounts with limits, balances, payment history and open and close dates; collection items; public records such as liens, foreclosures, bankruptcies and judgments; and inquiries, the companies that have accessed the report. Lenders, insurers, landlords and utility providers can use it, and an employer only if you agree.
Why are my three credit reports different?
Because creditors are not required to report to every credit reporting company, the CFPB notes, so one report can hold an account or an inquiry that another lacks. That is the reason to check all three rather than one: an error or a fraudulent account may appear on only one of them.
How do I dispute an error on my credit report?
Write to the credit reporting company that shows the error, explain what is wrong and why, and include copies, not originals, of documents that support you; the CFPB suggests certified mail with a return receipt. Send the same dispute to the furnisher, the company that reported the information. The reporting company generally must investigate within 30 days and tell you the result within five business days of finishing; if the information is wrong or cannot be verified it must be updated or removed. If that does not resolve it, submit a complaint to the CFPB.
Does checking my own report hurt my credit score?
The CFPB's pages on getting your report describe the free weekly reports as something to review regularly and list no effect on your score from doing so; the inquiries section of the report records companies that accessed it for credit decisions. Your own review is not a credit application.
Sources
- CFPB: What is a credit report? (a statement of your credit activity and payment history; credit reporting companies; identifying information, credit accounts, collection items, public records and inquiries; who uses it; employers only with your permission; creditors need not report to every company)
- CFPB: How do I get a copy of my credit reports? (AnnualCreditReport.com, 877-322-8228 or mail; reports from Equifax, Experian and TransUnion once a week; the other situations that give a free report; caution about sites that charge)
- CFPB: How do I dispute an error on my credit report? (dispute in writing with copies of documents to the reporting company and the furnisher; investigation generally within 30 days, up to 45, plus 15 if you add information; results within five business days; wrong or unverifiable information updated or removed; a complaint to the CFPB)
General information based on the sources above, not tax, legal or financial advice.