What Is a Credit Report?

a graphic illustrating what a credit report is and how it is useful for consumers

A credit report is like a history book, but instead of being about rulers, civilizations, or wars, it’s a history of your ability to manage debt. Lenders and other companies will open this book, review your past debt management, and then decide if you’re a good bet to do business with. This history book includes the records of how well you pay your bills, your amount of debt, what types of debt you have, and the age of your credit accounts. If a payment has been 30 days late or you have a perfect payment history, these things are reflected on the report and could result in very different outcomes when applying for future credit. From this past credit management experience comes a three-digit number called a credit score which has a significant impact on your ability to qualify for new credit.

Key Takeaways:

  • Credit reports have a massive impact on many aspects of our lives.
  • You can access your credit reports from all three credit bureaus for free once a year.
  • It’s crucial to check each report and review for accuracy.
  • Credit reports and credit scores are different.
  • It’s essential to know the four components of a credit report and what each means to determine your creditworthiness.

How To Read a Credit Report

At first glance, a credit report might look complex. You will see personal information, credit inquiries, credit accounts, payment history, and public records. While credit reports from the three national credit bureaus should reflect the same information, they will reflect it in different formats. The three national credit bureaus are Equifax, Experian, and TransUnion, and the government has mandated that you be entitled to a free copy of each credit report every year through the annual website AnnualCreditReport.com. At the beginning of the report, you will see your personal information, including your name (and former names or aliases), birth date, and Social Security number. Additionally, you will see current and past addresses and contact information like telephone numbers. Read your personal information carefully and ensure it is correct. Even a misspelling of your name, a wrong Social Security number, or an unrecognized address could indicate that your report is confused with someone else. As you move down the report, you will see your employer history, followed by your credit history and public records. Last will be your credit inquiries showing who has accessed your report.

Credit Score vs Credit Report

Sometimes people will use the terms credit score and credit report interchangeably, but they are very different. Credit Report: A credit report is a detailed breakdown of your credit history for the past seven years. Credit Score: Your credit score is a three-digit number considering everything on the credit report. Your credit score makes it easy for you and others to know how responsible you have been with credit from the past until now. The different companies generally operate on the same scale, but your score will typically vary between them due to the scoring model used, the dates the scores are accessed, or if a bureau has errors on your report.

What Is on a Credit Report?

There are four components to a credit report.

Your Personal Information

  • Expect to see your full name or any other variations of it
  • Your current and past addresses
  • A list of current and past employers
  • The names of others with whom you applied for joint credit.

Your Credit Accounts

  • Every loan and credit card from the past seven years will be listed along with an on-time payment history. That payment history will reflect your payments as on-time, 30 days, 60 days, or 90-plus days late.
  • Even accounts that have been closed are on your credit report and will stay on the report for up to ten years. While on the report for ten years, only seven years of payment activity are reflected for each closed account.
  • If an account has been turned over to collections, a property foreclosed, or a vehicle or merchandise repossessed, those will be recorded as part of your account management history.
  • If you've ever wondered what is a charge off on a credit report, these will be reflected as well. They mean a creditor was owed money, unable to collect, and wrote the debt off.

Credit Inquiries

Companies will request copies of your credit report for a variety of reasons. It could be checked by a potential landlord when you apply for a rental, an insurance company setting the rates for a new policy, by a credit card company, or even by yourself. These inquiries are reported for two years and will be one of two types:

  • Hard inquiries: When applying for new credit, the creditor will request a copy of your credit report. Hard inquiries indicate that you’re applying for credit and they could harm your credit score, especially if there are excessive inquiries.
  • Soft inquiries: If you, a landlord, or an insurance company check your credit, the result will be a soft inquiry. If a lender checks your credit to determine your loan eligibility, provide you a quote, or if a credit card company checks your credit for a pre-qualification offer, that is also a soft inquiry, as you were not applying for new credit. This type of inquiry indicates that your report was checked for something other than a new credit application.

Your Public Records

The most detrimental record on a credit report will be bankruptcy, which indicates past creditors might not have been paid. Whereas other types of public records appeared in your report in the past, bankruptcy is the only public record now.

Review Your Report Thoroughly

It is critical to thoroughly review your credit report for errors, especially your payment history. Check that account numbers, account names, balances, due dates, and payment history correspond to your own records; know that credit bureaus do make mistakes and have ways to contact them in such a case.

How Often Should You Access Your Credit Report?

In December 2003, President George W Bush signed into law the ability to access your credit reports free once a year through the Fair and Accurate Credit Transactions Act. The act was instituted based on the premise that consumers should not have to pay to know if their credit reports are accurate. You have additional access to reports if you are denied credit, believe your reports are inaccurate due to fraud, are unemployed, receive public welfare assistance, or your state laws provide for additional free reports. Take advantage of the yearly free reports and ensure they remain accurate. Additionally, reviewing those reports yearly reveals any potential attempts for identity theft, which can be destructive.

What To Look for in a Credit Report

Checking your personal information is crucial to ensuring your report hasn’t been confused with someone else. If you see discrepancies, it’s imperative to contact the credit bureaus. Most important is to confirm your accounts and payment records are correct. If an account isn’t yours or a late payment is reported when your payments have been made on time, start by reaching out to the creditor. An adverse payment record can tremendously affect your credit score, so be thorough.

Bottom Line

In the U.S., credit reports tremendously impact our lives, affecting everything from insurance rates, our ability to rent an apartment, whether or not we get hired, and if new credit accounts will be approved. It’s essential to take advantage of the free annual reports and check that they are correct.


  1. Free Credit Reports | Consumer Advice
  2. Why Are My Credit Scores Different? Which One Matters Most?
  3. Hard Inquiry: Definition, How It Works, Impact on Credit Score
  4. How Bankruptcy Affects Your Ability to Secure Credit
  5. Public Records That Can Appear in Your Credit Report - Experian
  6. COVID-19 Brought in Free Weekly Credit Reports. It Could Go Away in 2024.
  7. How do I get a free copy of my credit reports? | Consumer Financial Protection Bureau

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