Credit Report Information: Understanding What It Contains

One of the most important parts of a consumer's life is their credit

. The information contained in your credit report is used for many different things, from determining whether or not you can buy a home or car to getting a job. Your history contains all of the information that companies use to make their decisions.

There are three agencies in the US that are responsible for maintaining consumer histories. Each agency will have some of the same information, but there will be a lot of information that will be different. Not every business reports to all three agencies, so it is a good idea to get a copy from each one. There may also be some accounts that you know you have had that are not listed at all.

Accounts that you have applied for with creditors or lenders will be listed as trade line accounts and divided into one of three smaller groups. An account is listed as revolving when it continues month after month until it is closed, such as charge cards. A mortgage account is one that uses some type of real estate as the basis for securing a loan. The installment accounts are those that continue for a specific period of time with a set payment amount during the life of the account, such as an auto loan.

Another category is called Inquiries where request for your history are recorded. A hard inquiry is one that occurs when a business checks your history to determine if you are eligible to open an account with them. A soft inquiry occurs when a company that you already have an account with does a periodic check on your history.

Your accounts are separated based on the status of the account. If you pay regularly and on time, the account is listed in the positive section. Late payments, defaulting on loans, and other such things put the accounts in the negative section. Creditors look at both sections to determine if you will be approved and how much your limit will be.

Nearly everyone finds an error in their history at some point. It is actually a common occurrence. Sometimes there are things on your history that you know do not belong, while other times there are errors in payment reporting or limit amounts. You will need to file a dispute with each of the three agencies.

Disputing an error is going to take a little time. You must submit a written request that contains the company's information, the account number, and any other information that is listed in your history. The agencies then contact the company and provide a 30 day period to which they must respond to the dispute and it can be removed.

Your credit report plays a large role in your life. Not only is it a big part of consideration for loans and lines of credit, but some companies run the history of potential employees. The Fair Credit Reporting Act is a law that protects consumers from having their reports accessed illegally. Collectors, for example, are not legally allowed to pull reports and use any of the information against consumers and they can be sued if they engage in such practices.

by: Tracy Narvaez

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