Part 1: What You Should Know About Your Credit Reports

By Ron Sibley
President, Community Guaranty Savings Bank

Your credit report provides valuable information to lending institutions, landlords, employers, insurance companies and other service providers who need to make decisions on whether to approve your application for a loan, a job, a credit card, housing, or want to offer you a product or service at a special rate. They purchase your credit report from one of three reporting agencies in the United States:  Equifax, Experian, and Trans Union.

What’s included on your credit report? Your personal information compiled from credit applications you’ve filled out, including your name, current and recent addresses, Social Security number, date of birth and current and previous employers, is included.

A large part of your credit report provides facts about credit accounts opened in your name or ones that list you as an authorized user. They include names of creditors with whom you have an account, the date the account was opened, the credit limit or amount of a loan, payment terms, outstanding balance and your payment history, indicating whether you have paid your account on time. It also provides information on closed or inactive accounts for the past 7-11 years from the date of the last activity.

Whenever a party such as a lender, service provider, landlord or insurer requests your credit report, that inquiry is recorded and remains on your credit report for up to two years, providing you with a recent history of inquiries.

Public record information also stays on your credit report for seven years. That includes matters of public record, such as liens, bankruptcies and overdue child support obtained from government sources.

Your credit report does not include information on your checking or savings accounts, bankruptcies older than 10 years, charged-off or debts placed for collection that are older than 7 years. Nor does it include gender, ethnicity, religious or political affiliations, medical history or criminal records.

Your credit information is always changing so it’s extremely important that you review that information regularly to verify its accuracy. This is especially important at a time when identity theft is occurring more frequently. Remember, whenever you pay by credit card, your credit card number can be stolen…or a hacker can break into a financial database of a national chain, even a credit card issuer, and steal it, or you could unknowingly provide a phisher with personal information that will be used to steal your identity.

You may not even know until months later that car loans, credit cards, even home mortgages, have been opened in your name. Monitoring your credit report several times a year not only provides you with up-to-date information on your credit report, it minimizes your financial damages and credit standing from identity theft. 

How can you obtain a copy of your credit report? Effective September 1, 2005 the Fair and Accurate Credit Transactions (FACT) Act gives you free access annually to your credit report from the three reporting agencies. If you stagger your requests over the year you’ll be able to see your credit report three times at no cost.

To obtain a credit report, visit www.annualcreditreport.com or call toll-free 877-322-8228. Your credit report is free after September 1, 2005.

PART II: Reading and Understanding Your Credit Report Score will appear in a later issue of the Business Section of the Record Enterprise.