A credit report is a record of a person’s credit activities. It includes credit card accounts or loans that a person has, the balances, and how regularly payments are made. It also shows if any actions have been done if there are unpaid bills.
Credit reports come from companies that gather and sell credit information. They are called consumer reporting agencies, most common of them are the credit bureau. There are three major credit bureaus, Experian, Equifax and TransUnion.
A person’s credit rating comes from the credit report, which runs through the borrowing, charging and payment activities of a consumer. A good credit rating helps in attaining financial goals while poor rating limits opportunities. Since the credit report influences a person’s qualification for credit, employment, insurance and housing rental, it is very important to maintain a good credit rating by paying bills and loans on time and by not taking on more debt than you can.
Legally, credit bureaus can give information only to the following: creditors who are thinking of granting or have granted you credit; for employment, promotion, reassignment, or retention; insurance companies giving you a policy or reviewing an existing policy; government agencies reviewing your financial status or government benefits; and anyone else with a legitimate business need for the information, such as a landlord. Credit bureaus also provide reports if called for by court orders or federal jury subpoenas. They will also furnish reports to third parties if requested through writing by the person concerned.
Acquiring free credit reports are rights of a consumer as amended in the Fair Credit Reporting Act of 2003. This was done by the government to ensure that all have the right to stay informed. It also gives Americans the opportunity to know what the credit reporting bureaus are saying about them, without having to pay for the information.
To avoid any problems, it is important to see a copy of one’s credit report before applying for any credit. Errors in credit reports can happen, which can be from the result of human error or from identity theft, and these can then eventually lead to fraud.