A credit report helps bring your personal and financial information and history into perspective. Creditors, lenders, employers and others use your credit report to try to gain an understanding of your life, level of responsibility, and overall creditworthiness by the information contained within your credit report.
Reviewing your credit report and becoming familiar with the information contained therein will give you a better understanding of the decisions that creditors, lenders and employers are making about you. Knowing what your credit report says ahead of time will also afford you the time to amend, fix, or correct any inaccuracies or problems that might have appeared before applying for a new job or new line of credit - raising your chances of being approved.
There are three major credit reporting agencies - Equifax®, Experian®, and TransUnion® - that maintain your credit reports and translate those reports into your credit score. Whenever you apply for a new loan, a new job, or other line of credit, businesses request the information stored at these credit bureaus so that they may use that information to make decisions about you.
The information stored in your credit reports is based on what banks, apartment buildings, retail stores, and other businesses have reported to the credit bureaus about you.
Theoretically, each of the three major credit bureaus should have the same information about you. However, most times the information that they have about you is very different. The differences are most often caused because financial institutions, banks, and other companies with whom you do business only report your information to one bureau rather than all three.
Because of this, your credit score may be very different at one credit bureau than it is at another credit bureau. Because you don't know which credit bureau a company uses when running a credit check to make a decision about you, it's important to monitor and review your credit report from each of the three credit bureaus to ensure they are all accurate.
The Fair Credit Reporting Act declares that any lender through which you have applied for a loan or line of credit can view your credit report. However, there are many other people who can gain access to your credit report simply by supplying the credit bureau with just cause:
- Landlords
- Utility companies
- Phone companies
- Hospitals, clinics, and health care providers
- Insurance companies
- Criminal investigators, lawyers, and courts
As soon as you find an inaccuracy or discrepancy on your credit report, you should notify the credit bureau and begin the disputing process immediately. Although mistakes can happen, the longer you wait to report the inaccuracy, the longer it may take to correct or remove it if it has a negative impact on your credit score.
