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Credit and Credit Scores

Credit and Credit Scores

Learn more about your credit and credit scores:

Credit Reports

A credit report is a record of your credit history, issued by three credit-reporting agencies: TransUnion, Equifax and Experian. A credit report includes:
  • Identifying Information: name, Social Security number, date of birth, current and former addresses, spouse and employment history.
  • Your Credit: information about your current and past loans, credit cards and mortgage loan details including opening date, loan amount or credit limit, current balances and timeliness of payments.
  • Public Records: information on court judgments, tax liens, accounts in collection status, foreclosures and bankruptcies.
  • Inquiries: a list of companies that have requested a copy of your report.
A credit report does NOT contain criminal, medical or bank account information.

Credit Inquiries

Your credit report serves as a financial reference for lenders, employers and other businesses as permitted by law. To obtain a credit report, the requester must meet “legitimate business need” criteria established by the Fair Credit Reporting Act.

Who can access your credit report?

  • Lenders: when you apply for a loan, lenders may review one or all three agency credit reports to determine how you have handled past loans. Lenders may also request your credit report at intervals throughout the life of your loan to assess any changes in your credit history or to aid in collection efforts.
  • Employers: current and potential employers may pull your credit report, but only with your permission. A permission statement is usually included on the job application. Credit reports provided to employers are different from those provided to lenders. An employment credit report excludes certain personal information, such as account numbers, birth date and marital status. An employment inquiry does not affect your credit score, and only appears as an inquiry on a credit report issued to you personally.
  • Apartment Rental: most landlords review your credit report as a component of the application process.
  • Utilities: utility companies, including cellular and cable providers, review your credit report during the contract approval process. Your credit report may determine if, and how much, of a deposit will be required.
  • Insurance: auto and homeowners insurance companies use credit report information, along with other factors, to help predict your likelihood of filing an insurance claim. A low credit score could result in a higher premium.
  • Court Order: a credit report can be obtained through a court order or federal jury subpoena.

“Hard” Inquiries vs. “Soft” Inquiries
A hard inquiry occurs when a business obtains your credit report in connection with a credit application you initiated. Hard inquiries appear on your credit report and may affect your credit score. However, multiple inquiries within a few weeks will appear on your credit report as one inquiry, so your credit score is not penalized for loan shopping.

A soft inquiry occurs when your credit is checked for other reasons, such as employment inquiries, preapproved credit offers and personal requests for your own credit report.

Credit Reporting Cycle

To understand how credit information is collected, let’s look at the reporting cycle.

The three credit reporting agencies (Experian, Equifax and TransUnion) update your credit report as they receive new information from creditors. When you apply for or obtain new credit, or contract for a utility service, your personal and loan information is reported to the credit bureaus. Creditors report initial loan terms and provide monthly updates on outstanding balances, and the timeliness of your payments.

Credit reporting agencies also collect public record information from state and county courts, and information on overdue debts from collection agencies.

Creditors and other sources may not report information to all three agencies, so your reports from each agency could differ.

Your credit history stays on your report for a specific number of years, based on the type of information.

Credit Scores

Each credit-reporting agency calculates a credit score based on your credit history. Credit reports contain many pieces of information, so the score serves as an objective tool to help lenders assess your credit risk. Your score affects the credit and terms made available to you. A higher score provides access to more financial options and better loan terms. Your score can change as new information is received by the credit reporting agencies. Understanding what affects your credit score, and how it’s calculated, will help you take the appropriate steps to build or improve your score.

Credit scores are based on a FICO model developed by Fair, Isaac and Company. Each credit-reporting agency uses a different name, and a slight variation of the model for their credit score. That’s why your score can vary slightly by agency. Scores range from 300 to 850 and are determined by a mathematical equation. The factors and percentages in the chart below vary slightly by reporting agency and for different population groups, such as those with a very short credit history.

Monitor Your Credit Report

Since your credit report is considered in decisions that affect many aspects of your life, you’ll want to ensure it contains complete and accurate information. A regular review of your report will identify clerical errors, detect incorrect information or reveal identity theft (when someone falsely uses your personal information to obtain credit).

The Federal Trade Commission encourages you to visit, the only authorized central source for your free annual credit report. Other sites may charge a fee or be fraudulent sites designed to steal your information.

You can check your credit report on the central site as often as weekly. If you plan to obtain a loan, review your report a few months ahead of time so you can correct any errors that could hinder the loan process.

Contact the credit-reporting agency directly to report any discrepancies. The agency is required to investigate your complaint within 30 days.

Your free credit report does not include your credit score. However, the central website provides you an opportunity to purchase your credit score, including an explanation and advice for improving your score.

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