Understanding Your Credit Report

Your credit report is a detailed history of how you've handled credit. Lenders, landlords, and even some employers check it. Understanding what's on it—and how to fix errors—is essential.

credit report vs. credit score

Credit report: The full document with all your credit history Credit score: A three-digit number calculated from your report

Think of it this way: your credit report is the test, your credit score is the grade.

The Three Credit Bureaus

Three companies collect and maintain credit reports:

• Equifax
• Experian
• TransUnion

Each may have slightly different information, so check all three.

What's on Your Credit Report

Personal Information

• Name and aliases
• Current and previous addresses
• Social Security number
• Date of birth
• Employers

This section doesn't affect your score but helps verify your identity.

Credit Accounts (Trade Lines)

For each account:

• Creditor name
• Account type (credit card, auto loan, mortgage)
• Date opened
• Credit limit or loan amount
• Current balance
• Payment history (on-time, late, missed)
• Account status (open, closed, in collections)

Credit Inquiries

Hard inquiries: When you apply for credit. Stay on report for 2 years, affect score for 1 year.

Soft inquiries: Background checks, pre-approvals, checking your own score. Don't affect your score.

Public Records

• Bankruptcies (stay 7-10 years)
• Civil judgments
• Tax liens

Collections

Accounts sent to collection agencies. These significantly hurt your score.

How to Get Your Free Reports

You're entitled to free credit reports:

• AnnualCreditReport.com: Free weekly reports from all three bureaus
• Credit Karma, Credit Sesame: Free ongoing access (uses soft pulls)
• Your bank: Many now offer free credit score monitoring

Never pay for your credit report—free options are always available.

Reading Your Report for Errors

Errors are more common than you'd think. Check for:

Wrong personal info:

• Misspelled name
• Wrong address
• Incorrect Social Security number

Account errors:

• Accounts you don't recognize
• Wrong balances
• Incorrect payment history
• Closed accounts showing as open
• Duplicate accounts

Outdated information:

• Negative items older than 7 years (10 for bankruptcy)
• Paid collections still showing as unpaid

How to Dispute Errors

If you find an error:

1. Gather documentation: Proof that the information is wrong
2. File a dispute with each bureau: Online, by mail, or by phone
3. The bureau investigates: They have 30 days to respond
4. Creditor verifies or corrects: If they can't verify, it must be removed
5. Get results in writing: Request updated report showing correction

You can dispute directly with the creditor too—sometimes faster.

Monitoring Your Report

Check your credit report:

• At minimum: Once per year from each bureau
• Better: Every 4 months (rotate between bureaus)
• Best: Use free monitoring services for alerts

Monitoring helps you:

• Catch errors early
• Spot identity theft
• Track your credit-building progress

What Hurts Your Report

Listed from most to least damaging:

1. Bankruptcy
2. Foreclosure
3. Collections
4. Late payments (especially 90+ days)
5. High credit utilization
6. Too many hard inquiries

What Helps Your Report

1. On-time payments (most important)
2. Low credit utilization
3. Long credit history
4. Mix of credit types
5. Limited new applications

The Bottom Line

Your credit report is your financial transcript. Check it regularly, dispute errors promptly, and understand that everything on it affects your credit score and financial opportunities.