What Is a Credit Report?

What Is a Credit Report?

By Charles Joseph | Editor, Financial Affairs
Reviewed by Corey Michael | Senior Financial Analyst

A credit report is a record that contains information about your credit activity and current credit situation, including your loan paying history and the status of your credit accounts. Lenders and creditors often use these reports when they are deciding whether to offer you credit. These reports are also used to determine the terms you are offered or the rate you will pay for the loan.

Having good credit can make it easier to get approved for loans and credit cards, as well as lower interest rates that a lender may charge you. Besides, good credit can also be beneficial when renting an apartment or getting cellular phone services. Lenders, landlords and service providers use your credit to determine whether they will provide services to you and under what terms.

Related Questions

1. Who Compiles the Credit Reports?

Credit reports are compiled by entities often referred to as credit bureaus or credit reporting agencies. The three major credit bureaus in the U.S. are Equifax, Experian and TransUnion.

Want More Financial Tips?

Get Our Best Stuff First (for FREE)
We respect your privacy and you can unsubscribe anytime.

2. What Information Does a Credit Report Include?

Credit reports contain personal information like your name, address, social security number, and often employment information. It also includes credit information such as credit accounts detail with different creditors and lenders, balance, payment history, and any involvements in bankruptcies or tax liens.

3. Are Credit Reports Always Accurate?

No, credit reports aren’t always accurate. Sometimes they may contain errors caused by typos or cases of mistaken identity. It’s suggested to check your credit report regularly for errors and dispute them if necessary.

4. How Often Should I Check My Credit Report?

It’s recommended to check your credit report at least once a year. This can help you spot any inaccuracies or signs of potential identity theft early.

5. How Can I Improve My Credit Report?

To improve your credit report, try to pay all your bills on time, avoid taking on too much debt at once, keep your credit card balances low, and avoid any negative actions like foreclosures or bankruptcies as they can stay on your report for several years.