Frequently Asked Questions about Credit Reports
- What are credit reports?
- What should I expect and not to expect from credit reports?
- Who has access to credit reports?
- What are credit scores?
- Why do credit report and credit score matter?
- What is a credit monitoring? Why should I need one?
- What kind of credit report monitoring?
- What are inquiries? What is hard inquiry? What is soft inquiry?
- Is it necessary to monitor the credit score and the credit report?
- Are credit reports for free?
- How do I make corrections to credit reports?
- How do I make corrections to credit reports?
- Should I and my spouse get a separate service for credit monitoring? Can married couple get a discount?
- How to cancel a in credit report monitor service?
- Does getting my copy of a credit report or hiring a credit report monitor service hurt my credit scores?
- If I am only interested in seeing the credit score, is it possible for a one-time fee?
- Is it possible to get the credit report without the credit card?
- How does this web site review the agencies that provide credit report monitor?
- What are credit scores?
- How are credit scores computed?
- To whom do credit scores matter?
- How are credit scores affected negatively?
- How are credit scores affected positively?
- Does having a lot of inquiries affect negatively the credit scores?
- What are bad and good credit scores?
- How will you know your credit score?
What are credit reports?
Credit reports are a document containing information compiled from different sources, which form part of your credit history. There are three largest credit bureaus in the United States. These are Experian, Equifax, and TransUnion.
They collect files from those whom you have engaged transactions like the creditors, banks, employers, insurance company and similar institutions.
If you entered a loan contract and or mortgage with a bank or a lender, data like the amount of mortgage, the property that is subject to a mortgage, the interest rate, the monthly payments made including delayed and defaults are recorded. It will also contain information whether the loan has been paid, when it was finally paid off, and the balance, if any.
Public records form part of the sources, so that if you have any tax lien, bankruptcy declarations, or any legal impediments.
Each of the three bureaus will issue a credit report and the information may vary according to the sources from which the data are obtained. Every year, each of the bureaus will issue a credit report and will include updates about your financial activities.
Credit reports are requested by creditors, employers, or banks whenever you apply for a loan, an employment or credit card line to evaluate your credit worthiness or risk. The inquiry made is known as hard inquiry and the number of times that an institution or individual has requested for your credit report will be recorded as well. This, too, affects your credit score.
If the bank grants a loan or approves a credit card line, or hires you, the institution will report to either of the bureaus or all of them.
What should I expect and not to expect from credit reports?
The data you can find in credit reports are:
Personal Data: This refers to the general information about you such as complete name including the previous names used, previous and current addresses, telephone number used throughout the years, birth dates, social security number, and employment history.
Credit Data: These are specific such as previous and current credit accounts and those which have been made with your authorization. They include dates of every account, credit limit or loan amount, terms of payment, balance and history of payments made. Late payments, defaults and other negative information are recorded for seven (7) years, while the positive data remain indefinitely.
Public Record Data: These are available to the public and obtained from courts of justice like bankruptcies, overdue on child support, and tax liens. Bankruptcy filings under Chapter 7 remain for 10 years, while those filed under Chapter 13 are recorded for seven years. Tax liens that are unpaid are also kept for more than 15 years. Paid tax lien remains for seven years. All other public record data remain for seven years.
Inquiries: If a third-party like creditors, employers, insurers, and banks make a hard inquiry (request for your credit report when you apply for a loan or mortgage), such will be recorded. They can have a negative effect on credit scores if there are several hard inquiries made within a short period.
A short inquiry refers to a request of your credit report for the purpose of marketing like offering you pre-approved credit. They do not affect the credit score and will not appear on reports as well, although there are credit monitoring bureaus which will include them for purposes of providing information.
Data not included on credit reports:
It will not include information about savings, checking and brokerage accounts. Criminal records and those which pertain your religion, race, and medical history are not included, too. Even your score cannot be seen although it can be generated from information obtained from the credit reports.
Who has access to credit reports?
Any entity or private individuals who have a business need with you can request for a credit report. These businesses can be creditors like a credit card company, lenders like mortgage lenders, insurance companies, utility companies, mobile companies, and courts. If any of these institutions request for credit reports, consent is not needed. Government agencies which are tasked to grant government license or benefit, and local agencies responsible for child support enforcement can have access too.
Individuals who may request for credit reports are employers and landlords, but they need your consent.
What are credit scores?
Businesses created formulas to convert the data found on credit reports into a numerical value which represents your creditworthiness (or risk). These numerical values are the credit scores. Generally, the systems used in scoring the credit have a uniform numerical range—from 300 to 850.
If the credit score is higher, it means your credit risk is lower (or your creditworthiness is higher). FICO scores are distributed as follows:
Lenders rely much on your credit score to assess your likeliness of timely paying back the loan. But other information is also considered in deciding approval of your loan and its amount. Creditors have different approaches in assessing credit scores, and no specific rules are used. However, the general guidelines in determining the value of credit scores are shown below.
- Above 750—Excellent: You are entitled tohave any credit types at the best interest rates
- 720—750—Very Good: You are entitled to almost any credit types and usuallywith the best interest rates
- 660—720—Okay: You are entitled to most credit types but often not with the best interest rates
- 620—660—Below Average: You are still entitle to some credit types but at bigger interest rates
- Below 620: Bad Credit: You find it difficult to get credits and when you do, your interest rates are higher
The credit scores are computed based on data found on your credit report. In the United States, there are three credit reports released (Experian, TransUnion, and Equifax), and each report will have its own credit score.
The most commonly used formula is FICO, but the credit bureaus use their own. Creditors compute custom scores based on some personal information that is obtained from sources other than those used in providing information on the credit reports.
So, for every formula used in computing the credit score, you will get three various credit scores. And because there are several formulas, a consumer can get several credit scores.
The credit scores obtained from this web site are either scores from the bureaus or from FICO. Generally, it is helpful to get the FICO score because it is the one used by most lenders.
You have to understand that when the credit bureaus accumulate new data, such data will be considered in computing the credit scores. So, the credit scores change from time to time.
Why do credit report and credit score matter?
Credit report and credit score are important for three reasons. One, businesses rely on these two whenever you apply for a loan or mortgage, or a credit card. They use the credit report and the credit score whenever you want to enter a lease agreementfor an apartment, apply for a regular mobile phone line, a cable TV without the need to make pre-payment.
If your credit history as found on the credit report is strong and your credit score is good, you should not have any difficulty in the transactions mentioned above. But if your credit score is not good, you will have difficulties getting a loan or a phone line. And even if you do, the interest rates are higher.
Another importance of credit report and credit score is the interest rates that can be charged on your loan or credit card. This means that if your credit score is high, you have higher chances of getting the low interest rates. Lenders including the banks will use the information found on the credit report and the credit score in determining your interest rate.
For instance, in purchasing a house, you want to obtain a mortgage amounting to $216,000. If you have 760 for a credit score, the interest rate that you can get is 5.86 per cent based on the current rates. On a fixed 30 years, your monthly mortgage will be $1,276.
If you have a 630 credit score, your rate will be 7.45 per cent and the monthly payment will be $1,503. The difference will be $227 each month or $2,724 a year. For the entire mortgage duration, the difference will be $81,720.
If you get a score below the 600 mark, then your mortgage application will be declined.
The final reason is protection from identity theft. Identity theft is very common nowadays. Aside from losing money, you will also have your credit history decimated, your credit score lowered, and on some cases, your present credit revoked. It will take months or even year to have your credit score fixed.
One way of knowing if you are a victim of identity theft is a change on the credit report, like an inquiry made by a thief who attempts to make an account using your name. If you have a subscription service from a credit monitoring bureau, it will inform you within 24 hours of any change made on your credit report.
What is a credit monitoring? Why should I need one?
Credit monitoring is a service designed to monitor a credit file on a daily basis, and to alert the consumer for any changes made. Credit monitoring is helpful in insuring you are taking control over your credit and in a position to prevent identity theft.
As new information can affect the data written on the credit report and on your chances of obtaining a credit, it is recommended to track down your credit of inaccuracies or changes. If there are any mistakes or inaccuracies on your credit report, it is important to file a dispute to correct them. And you can do this when you do a credit monitoring.
Credit reporting is efficient in preventing identity theft. Identity thieves intend to make new accounts using your name. Such will lead to a “hard inquiry” to any of the three large credit agencies in the United States. If an identity thief attempts to obtain an account using your name, the creditor will make an inquiry about your credit report. And such inquiry will be reflected. When you have a copy of your credit report and find an inquiry from a lender whom you did not have any transaction with, then it is possible that someone tried to apply for a credit using your name.
You can catch the thief by making a follow up on the supposed lender or on the agency doing your credit monitoring.
What kind of credit report monitoring?
The three largest credit monitoring bureaus in the United States are the Equifax, TransUnion, and Experian. It is recommended to get a copy from all three because a change may occur to just one credit report.
For example, if someone wants to obtain a new credit card, the company with whom the application is submitted will request for your credit report (hard inquiry) from TransUnion, and you are monitoring your credit report from Equifax, then there is no chance of knowing such transaction.
Since it can be tiresome to monitor your credit from all three bureaus on your own, it is recommended to hire a service to do it for you. It is important to monitor your credit from all three agencies from one service provider. This way, you are assured that should there be any erroneous information that may have a negative impact (such as default or delayed payment) reported to any of the bureaus, you will have knowledge about it.
What are inquiries? What is hard inquiry? What is soft inquiry?
A hard inquiry is an act of requesting for a copy of your credit report by any third party such as banks, credit card provider, lending companies, and the like. The inquiry is made whenever you apply for a credit, loan or mortgage, or credit card from creditors. The purpose of that inquiry is to decide whether you should be given a credit. Whenever a hard inquiry is made about your credit report, it will be reflected on the next issue of your credit report.
If, for a short span of time, you have several hard inquiries, it can have a bad effect on your score. These inquiries are reflected on the credit reports for two years.
A soft inquiry is done when the purpose of the inquiry is for marketing like offering a pre-approved credit. These inquiries do not have any effect on the credit scores, and generally, do not appear on the credit reports. But there are bureaus that show them for purposes of giving information.
Is it necessary to monitor the credit score and the credit report?
It depends on some situations, but generally, it is recommended. If the reason for monitoring is to identify identity theft, then there is no need to monitor the credit score. But if have any plan of obtaining a credit like another credit card, a mortgage, or an auto loan, then, it is important to keep track of the credit score. This is because the credit score influences the credit type you can obtain and the interest rate that can be charged.
This is true whether your mortgage plan is not going to happen until next year or two. Credit reports provide information that you can verify. And the credit scores translate the data found on the report into ratings that lenders use to assess you.
Monitoring credit scores permit you to determine if the actions you took to improve your financial status are effective. If you want to obtain a credit, but your score is very low, you have to improve the score first.
Are credit reports for free?
Yes. Visit www.annualcreditreport.com and request for a copy of your credit report from any of the three credit agencies (Experian, Equifax, TransUnion) every year.
But the free issues from the three bureaus may not be enough in monitoring your credit because information—fraudulent or honest mistake—can happen anytime. You need to be informed of the changes as they happen in order to know what actions are necessary to avoid negative records on your credit report. This is true especially if you want to avoid identity theft.
How do I make corrections to credit reports?
You have to file a dispute request about the error to the credit bureau that gave the inaccurate information about your credit report. The dispute may be file online.
Which credit report monitor service provider offers assistance using Spanish?
Most of the reviewed service providers offering monitoring credit report and protection against identity theft offer such services in Spanish.
You can contact Spanish-speaking agents as follows:
Identity Guard: call the customer service main line and press the #1 button on your keypad from the phone menu. Next, press the #2 button on your keypad to connect to a Spanish-speaking agent.
Equifax: call Equifax’s customer service main line and press #2 button to connect to a Spanish-speaking agent.
For TrustedID, Privacy Guard, SmarterCredit, ProtectMyID, and Lifelock: call their customer service main line and ask the agent to connect you to their respective Spanish-speaking agents.
Should I and my spouse get a separate service for credit monitoring? Can married couple get a discount?
The credit reports are not merged upon marriage. Each of the couple will get their own credit report. However, there may be accounts or information that will overlap and appear on the couple’s reports, much of their credit history differs. This means that each of the couple should get his or her own credit report to know their respective financial health.
Getting a separate credit report is important because in case an identity thief attempts to open an account using your name, the transaction will appear on your credit report. If the thief opens an account using your spouse’s name, the transaction will appear on your spouse’s report.
If a married couple wants to have their individual credit monitoring, the most cost-efficient solution is _______. ______ offers discounts for married couples through its family plan, which covers family members who live on the same residential address. These family members can be children, spouses, and elderly parents. Moreover, the spouses will each have a report and score from the three bureaus upon signup.
How to cancel a in credit report monitor service?
Most credit monitor service providers reviewed by this web site offer free trial from seven to 30 days. Free trials let consumers receive their credit scores and reports for free, then cancel the service before the period ends. In such a case, consumers are asked for their credit card data. No fees shall be charged until after the trial. To cancel, just call your service provider’s customer service and inform them of your intention.
Having one copy of a credit report is not effective against identity theft because fraudulent transactions can happen anytime. Our credit monitor services are reasonably priced and optimal. We inform you instantly for any changes made on your reports.
We hope to serve you soon.
Does getting my copy of a credit report or hiring a credit report monitor service hurt my credit scores?
No. It will not have a bad effect if you request your copy or if you hire an agency to monitor your credit. If you authorize creditors to check on your credit, the checking is called “hard pull,” which can have a bad effect on the credit score. If you do the checking, it is called “soft pull,” which has not bad effect on credit scores.
You may check your credit reports or scores as often as you wish and the same will not affect the score.
If I am only interested in seeing the credit score, is it possible for a one-time fee?
Yes. Creditors use the FICO score. If you are interested in knowing how the creditors see your credit report, pay for the FICO score.myFICO computes the scores for Equifax and TransUnion. You can buy your credit score for Equifax and or TransUnion directly from myFICO’s FICO Standard at $19.95 each.
Every FICO score comes with a credit report and an explanation about your score. It also comes with FICO simulator, a tool that will estimate your score if you take several actions like paying off a debt on a credit card.
But getting one copy of a credit report every year is not enough because additional data may be added to them anytime. And that means the score changes whenever the data are recorded. To be efficient in monitoring the credit, it is recommended to get a copy of a credit report and get your score every four months from each bureau. This is true especially if you shop actively for loans. The data contained on credit reports are used in computing the score.
Check our reviews of credit report monitor to have regular tabs about your credit report and score.
Is it possible to get the credit report without the credit card?
Yes. You can get a free copy of the credit report every year from Experia, Equifax, and TransUnion by visiting www.annualcreditreport.com. The web site does not need your credit card.
But while it is cost-efficient to have a free copy from the three credit monitoring agencies, these copies are not enough if you want to protect yourself from identity theft and other fraudulent activities. These crimes may happen anytime and get reflected on your report. Unless you have been informed, there is no way to know an illegal transaction has been made using your name. Free credit reports do not come with credit scores.
If you want to employ a service to monitor your credit, you can use a debit or credit card. The debit cards have higher risks because the funds come directly from your account. For online shopping, use credit cards.
How does this web site review the agencies that provide credit report monitor?
We conduct research about the top service providers by hiring their services and trying out their features. We also read reviews and testimonials about each agency from different sources.
After the initial tests, we continue using their services and make an update of our reviews according to the changes we might experience. We also regularly visit their web sites for special offers or changes in their service.
We strictly test and review the agencies which are efficient and optimal in performance and services. If a provider is not listed on our site, it may be that the said provider was not rated high to be included. But if you believe there is a top-rated providerthat should be included, kindly check our Contact Us section.
What are credit scores?
Also known as credit rating, credit scores are computed risk. They are computed using several factors. The score (written in numerical values) represents your risk factor as a borrower. It is an important basis used by creditors to determine your risk when you apply for a loan, mortgage, or credit card. Creditors or lenders use the credit score to decide whether to grant your loan, and if so, how much should be given to you, and how much interest should be charged.
How are credit scores computed?
The credit score has three digits of number. There are several factors used in computing the credit scores. These are outstanding loans, existing credit, and overdrafts. The public records give useful information about your financial reputation. Examples are tax liens, bankruptcies, and summons.
Hard Inquiry is another factor. It means the number of times that lenders, creditors, or any institutions or private individuals have made a request to see your credit report for the purpose of granting your application. The more hard inquiries made about your credit score, the more it will affect your credit score.
Today, the credit scores of everyone are also considered to put you into a percentile, which will influence the approval of a loan and its interest rate.
To whom do credit scores matter?
There are two major parties to which a credit score is important. These are the consumer and the creditor. To the lenders, the credit scores are an important basis in defining how risky a certain mortgage or loan is. If the risk is high, the possible consequence can be a lower amount of loan approved but with higher interest rate. A loan application may also be declined.
To consumers, having good credit scores mean higher chances of getting any loan at best rates.
How are credit scores affected negatively?
The credit scores are computed based on financial performances throughout the years. Financial irresponsibility normally results in having low credit scores. Some factors that have a negative impact are having too many hard inquiries, late payments and defaults, big amount of overdrafts or outstanding loan, and several credit cards with high balances, to mention a few.
How are credit scores affected positively?
Credit scores are easier to besmirch than to ameliorate. Financial responsibility entails a long range of activities which will have a positive effect when maintained constantly. Late payments and defaults remain on your credit history for seven years.
Some ways to make better your credit scores are early or timely payments, not having many outstanding debts (high amount particularly), and avoiding any loan unless necessary.
Does having a lot of inquiries affect negatively the credit scores?
It is often said that if you have had a lot of credit inquiries reflected on your credit report, it can have a bad effect. It is also said that if you have had a lot of credit applications, it can have a similar negative effect. But while both premises are true, some credit scorers recognize applications as looking for the best offers in interest rate, and will not be counted as “over inquiry.”
What are bad and good credit scores?
The credit scores are computed in different ways depending on the agency that does the computation. In the United States, the famous and largest credit monitoring bureaus are TransUnion, VantageScore, FICO, Equifax, and Experian.
If you have a higher score (that is higher numerical value), you have a lower credit risk.
If the credit score is low, it will have an impact on the consumers’ chances of having their credit approved at lower interest rates.
Thus, it is quite impossible to classify generally what score is bad and which is good as an agency’s formula may be different from the other agencies’ formula. However, if an agency gives a favorable credit score, it normally means that other agencies may give a score closer to the one given by the other, if not the same.
How will you know your credit score?
Credit scores are available to banks, lending companies, credit card providers, and brokerages, among others.
Consumers can go online and visit the many web sites that offer credit reports and credit history assessment. Before a credit report is issued, you need to verify your identity by providing your personal information.
This website helps consumers in analyzing and comparing the optimal tools online to know your credit scores. We have feature and price comparison tools to help you find the score checker that will suit your needs.