The Basics On Credit Bureau Reports

When you apply for a loan, lenders rely on credit bureau reports to learn how trustworthy you are with money. They want to know: Do you pay on time? Have you skipped out on any obligations? Three major companies, called credit bureaus, collect and sell this information, which is known as a credit bureau report. The report usually also contains a credit score - a numerical ranking of your credit worthiness.

What's Inside Your Report
Thnk of credit bureau reports as essentially a financial report card on how you have handled credit in the past and present. Credit reports contain indentifying information, credit information, public records and inquiries.

Identifying information includes:

Your name

Your current and previous addresses

Your Social Security number

Your year of birth

Your current and previous employers

Spouse's name

Credit information includes credit accounts or loans you have with:

Banks, finance companies or credit unions

Retailers

Credit card issuers

Other lenders

Public records include any information that's contained in state and county court records, such as:

Bankruptcies

Tax liens

Monetary judgments

Delinquent child support

Credit inquiries include authorized requests to see your credit report when:

You have applied for new credit (which could result in additional debt). Potential lenders may view multiple recent inquiries on your credit report as a sign that you may be overextended.

Routine checks from your existing creditors don't count, nor does ordering your free report online.

How Long Information Stays on Your Credit Bureau Reports
Positive information stays on your credit bureau reports indefinitely, although information about an account comes off after about seven years if no new information is added.

Negative information, such as late or inconsistent credit payments, will stay on your credit report for at least seven years, as does public record information such as tax liens and delinquent child support payments. Bankruptcies, foreclosures and judgments can stay on your credit report for up to 10 years, and information regarding a criminal conviction has no time limit. Most inquiries stay on a credit report for up to two years.

Credit Report Privacy
Federal law and credit bureaus carefully regulate how credit reports can be used and by whom. Businesses must meet certain requirements before they can access consumer credit information.

These requirements usually include:

Proof of a permissible purpose under federal law

Background check and on-site inspection of the business

Burrent business license

Signed contract requiring the business to use the data properly

Deal with Errors in Your Report
It's a good idea to check your credit reports from time to time to make sure all information is accurate. Errors can, and do, occur. A good time to check your reports is before applying for a mortgage, auto or other loan. Correcting errors beforehand will make your loan application process much easier. If you have been denied credit and have not reviewed your credit reports, you should do so to make sure they are accurate. You are entitled to receive a free copy if you were denied credit.

When you find something wrong on your credit report, you have the right to challenge it. Submit your challenge in writing to the credit bureau, briefly explaining the issue. Include copies (not originals) of any documents that support your position. By law, the credit bureau must include this in your file, investigate your complaint (unless they consider it frivolous) and either verify the item in question or remove it from your file. At your request, the credit bureau will send a corrected copy of your report to anyone who received it in the past six months.

Getting Credit Reports
By law, you have the right to obtain your credit reports once a year from Experian, Equifax and TransUnion. A quick search online will show you many companies in this business. You can also visit annualcreditreport.com, the bureaus' offical site.