Credit reports gauge payment reliability, aiding lenders in the risk.
Therefore, it’s crucial to comprehend both what a credit report is and what to look for on one.
Credit report: what is it?
Credit report is a summary of your credit history, which includes the kinds of credit accounts you’ve had, your payment history, and certain other details like your credit limitations.
Your creditors normally give information for your credit reports to the three nationwide consumer reporting agencies (CRAs) – Equifax, TransUnion, and Experian. Depending on which CRA delivers your credit reports, you can see variations.
This is due to the fact that not every lender reports data to all three CRAs. Some just report to one or two people, if not none at all.
What uses does your credit report serve?
When determining whether to grant you credit and under what conditions, lenders analyze your credit reports as part of their appraisal process. Your credit scores are also determined using the data in your credit report.
Your credit reports may also be seen by potential employers and landlords who are deciding whether to hire you or rent to you. When you apply for insurance coverage, a mobile phone contract, or other services like utilities, your credit reports may also be checked.
What’s contained in an Equifax credit report?
The following categories of information can be seen in your Equifax credit report:
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Identifying details:
Personal data like your name, address, Social Security number, and date of birth are included in this area of your Equifax credit report, which is not utilized to determine your credit ratings.
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Inquiry details:
There are two different kinds of inquiries: “soft” and “hard.”
Soft: Checking your own credit reports, receiving pre-approved credit or insurance offers, or periodic account reviews from your present creditors are all examples of “soft” inquiries.
Regularly checking your credit reports is a low-risk way to monitor your credit accounts and help you spot wrong or incomplete information, as well as suspicious activity that may flag potential identity theft. Soft inquiries do not affect credit scores.
Hard: When organizations or people, such as a credit card company or lender, analyze your credit reports as a result of your application for credit or a service, this is referred to as a “hard” inquiry.
Hard inquiries can lower your credit scores and can stay on your credit reports for up to two years. One of the variables that affects your credit scores is the number of hard queries.
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Credit account details:
Your creditors provide this data to Equifax, and it includes the sorts of accounts you have, the dates those accounts were started, the credit limits on those accounts or the loan amounts you owe, the balances on those accounts, and your payment history.
It might not include all of your credit accounts in some cases, such as when a credit account has been closed and has been removed from your report after a specific amount of time or when a creditor has not reported the account to Equifax.
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Unpaid alimony and child support:
Even if the account is eventually fully paid, it’s possible for unpaid child support or alimony payments to land up on your credit record and stay there for up to seven years. Although settling the account won’t get it off your credit report, it might decrease the negative effect it has on your credit score.
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Bankruptcies:
Depending on the type of bankruptcy, bankruptcy entries normally stay on your credit report for seven to ten years. Your credit report will reflect a Chapter 7 bankruptcy for up to 10 years and a Chapter 13 bankruptcy for up to 7 years.
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Collections accounts:
Credit accounts, as well as those with banks, retail outlets, cable companies, mobile phone providers, physicians, and hospitals, can all be turned over to a collection agency. Medical debt that was turned over to a collection agency but that you have already paid off won’t be reflected on your Equifax, Experian, or TransUnion credit reports after July 1, 2022.
Additionally, a landlord may try to recover rent by selling your debt to a collection company. For up to seven years, the unpaid rent that was sold to a collection agency may appear on your credit record.
