The Low down on Personal Credit Reports

A Credit Article Contributed by Mark Mcclelland

Personal Credit Reports, What Do They Contain

Basically, your personal credit reports - data collected by the three nationwide consumer reporting agencies (CRAs) - TransUnion, Equifax, and Experian (Formerly TRW), contain a synopsis of your financial (and some would say personal) life. There are three of them, one each from each of the tree CRAs, and you might actually be surprised at the amount of data the CRAs are able to collect about you. The CRAs collect - and sell - four basic types of data about you:

* Identification and employment data: this type of data includes both your personally identifiable data like your name, birth date, Social Security number, and spouse's name, as well as data regarding your employment, like your employment/employer history, your current income, and your current and previous addresses and home ownership data.

* Payment history data: this type of data includes a list of your various creditor accounts, the credit limits on each of those accounts, how timely you are in making payments, as well as data regarding whether or not your overdue accounts have been referred to a collection agency.

* Inquiries: this type of data includes a list of all the creditors who've, within the last 12 months, asked for your credit history, and of prospective employers who've, within the past 24 months, requested your credit history as well.

* And Public record data: this data reflects events that are actually a matter of public record, such as bankruptcies, foreclosures, judgments, and tax liens. Being public, this data is actually available to anyone; it's just easier to get via the CRAs.

The Accuracy of Your Personal Credit Reports

The sad fact is that your personal credit reports are more likely than not to contain erroneous data. Over the years, there've been numerous articles and newspaper stories highlighting this problem. Some studies indicate that more than 60% of personal credit reports contain erroneous negative information like false delinquencies and judgments.

Others, like a 1998 investigation conducted by the Public Interest Research Group determined that 29% of the credit reports studied contained errors serious enough to result in denial of credit, that 70% contained mistakes or errors of some kind, that 41% contained erroneous personally identifiable data, and that 20% were missing critical data concerning credit cards, loans, or mortgages.

Decoding Your Personal Credit Reports

Each of the three CRAs has a unique way of formatting and coding their data - and it's important to understand that it is THEIR data. It may be about you, and it may be either correct or incorrect, but it is uniquely theirs. That's why understanding what they're saying is so important. Each CRA will provide a "Key to the Credit Report"-type document, as well as risk scoring codes and factors to help you properly decode and interpret your personal credit report.

So, accurately decoding the data contained in your personal credit reports is a major step in getting any erroneous data contained therein corrected or removed.