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What is a Credit Report and What Does it Include

credit report and its basics

Not sure what credit rating is? Learn what is a credit report through experts

For an average American, a good credit report plays a crucial role in their financial decisions. So what makes your credit report good or bad? What are some aspects of your payments and invoices that matter while calculating your credit points? 

Let’s discuss these queries in detail and figure out how they impact your credit scores.

What Is A Credit Report?

  • A credit report is a record of your credit activity and expense. This includes the name and credit limit of the loan and the company that provided the loan, as well as the loan amount and payment history. 

You can think of it as your financial resume since it tells potential lenders the past and present of your financial health.

  • The credit report helps lenders decide whether to approve your loan or not. The report also helps you determine the interest rate they will charge you. Employers, insurance companies, and rental property owners can also view your credit report.

What Does a Credit Report Include?

  • Credit reports contain a variety of information about you and your account, inquiries, and public records. Each credit center and reporting information format is different. However, by default, all credit reports contain the same category of information. 

You can estimate your score by knowing the aspects included in the credit report. To make it easier for you to understand what your credit report contains, we have jotted down some of its major aspects. Regardless of the agency, you can find the following terminologies in any credit report. 

Personally Identifiable Information (PII)

  • Your name, date of birth, address, employment information, social security number, etc, are included to help identify you. Your PII will not be used to calculate your FICO points but your credit report contains PII. This information is used when you apply for a new loan to cross-check your credit history.

Credit Account

  • Your credit report contains all accounts you have opened. It shows what type of credit account such as, credit card, mortgage, car loan, etc. you have. Along with a few necessary details like the date of opening and closure of a particular account, the lent amount, credit limit, closing balance, and transactional history are also given.

This information is necessary for the FICO score calculation, so it’s important to have a good reputation for your account.

Credit Inquiry

  • Your report contains a credit inquiry that contains two types of information: Soft inquiries and Hard inquiries. Soft inquiries don’t affect your score because they occur when you self review your score. But the hard inquiries have a major impact on your score. 

They occur when companies or individuals, like credit card companies or loan servicers review your credit report.

what is a credit report the basics

Archive and Public Collection

  • Credit investigation agencies collect information from state and local courts, including bankruptcy information. Overdue debts sent for debt collection will also appear on your credit report.

There is no quick fix for credit recovery. Even if your credit report includes unsorted debt, this is not the end of the world. You can still get your loan based on other included factors that are on point.

Final Thoughts

  • Credit reports can vary from one model to another but the composition is pretty much the same across all scoring models. Having a good credit report is essential for good financial status and if it isn’t, you might face some trouble getting your loan approved.

If your Credit Report is not looking great and you need professional help improving it, Credit Repair Today can help you amp up your credit score. Credit Repair Today is an accredited credit repair consultant.

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