Credit Report Basics

A Credit Article Contributed by Ajishnu Sharma

Understanding a Credit Report

Credit reports have become increasingly important in today's world. A history of every consumer's credit report is maintained by a creditor and obtained by him from the credit bureau, otherwise called the National Consumer's Reporting Agency. The credit history of a consumer helps a creditor predict as well as decide the level of risk he is willing to take by lending money to the particular consumer.

Contents of a Credit Report

A credit report contains all financial information of a consumer in detail. It also contains information like the consumer's name, date of birth, employment data - such as employment code, employer's name, period of time for which the consumer has been working with the current employer, details regarding the consumer's previous employer, the consumer's Social Security Number, or in some countries, the PAN Card number, details regarding home ownership, which includes details about the consumer's current as well as previous residential address.

Besides these details about the consumer under scrutiny, the creditor, who is usually a credit institution, such as a bank or some other such financial or lending institution, will look at other aspects of the consumer's finance. These aspects include the consumer's financial account record, payment history, etc. Other details that make their way into the consumer's credit report include such details as the consumer's extended credits and mode of repayment.

Along with all this, other financial data, such as details regarding overdue credit of the recent or further past that have been either transferred over to another creditor or to a collection agency are also recorded by the creditor.

Factors Influencing a Credit Report

Inquiries about a consumer's credit report or credit history for the last six months made by all and any creditor is required to be maintained by the credit bureau. This information remains on the credit report for a period of two years.

Events that are related to the consumer's credit worthiness appear on the credit report of a consumer. These facts can be positive as well as negative.

They can be of different types, for example, they could be details related to, the consumer's financial public recorded information, such as any financial litigation, financial judgments by a court of law, any attempt to file for bankruptcy, any foreclosure of loan, tax lien failure in repayment of a loan also appear on the credit report of the consumer. Such events are regularly updated on the credit report and have a timeframe of a period of ten years.

However, in special cases, this kind of information on a credit report can also last up to a period of twenty-one years.

National Consumer Credit Reporting Agencies

There are three major credit bureaus or national credit reporting agencies along with other smaller participating credit bureaus. These are:

1. TransUnion

2. Equifax

3. Experian

Under the fair Credit Reporting Act, all credit bureaus are instructed to provide consumers all details of their credit history for a nominal charge of about $4 to $8 on their request. A request for a creditor's credit history can b made to the credit bureaus by a written mail, which includes certain detailed information of the consumer.