Credit reports and credit scores go hand in hand: You can’t have one without the other. So what’s a credit report, why does it matter, and how can you use it as a resource to protect against identity theft and help improve your credit score?
What is a credit report?
A credit report is simply a moment-in-time snapshot of your credit history and outlook. It includes:
- Personal info: name, birthdate, address
- Summary of credit accounts: types of accounts (loans, credit cards, etc.), date opened, loan total/credit limit, current balance, payment history
- Inquiry info: both soft inquiries (checking your credit report, which doesn’t affect your credit score) and hard inquiries (when you apply for credit or loans, which may have a temporary negative impact on your credit score)
What might not be on your credit report? Oddly enough, your credit score. A credit score is a number that reflects your reliability or risk when it comes to things like paying back loans; that’s why checking a credit report for errors can have a direct impact on the accuracy of your credit score.
Tip: Very old accounts may drop off your credit history, depending on the credit bureau.
How to get a copy of your credit report
Good news: You can get a copy of your credit report once every 12 months—for free. Simply visit annualcreditreport.com to request a copy. When you receive it, check all the information to ensure it’s accurate. You can also request your credit report from a credit bureau; while there are multiple options, the biggest three are Experian, TransUnion, and Equifax.
If you find mistakes on your credit report, you have a couple of options. Start with the credit bureau: File a written dispute (search to see if they offer a form to use). You’ll have to send it and any documentation you have by mail; certified is best. Follow the same procedure with the lending company or business reporting the error. Finally, use resources at identitytheft.gov to report ID theft.
Why does a credit report matter?
Credit bureaus use the information from a credit report to create a credit score. If you forget to check your report regularly and there’s a mistake, it may impact whether you can secure new credit or get a lower interest rate, for example. (And lower rates equal lower payments and a lower cost of borrowing over time.)
One-third of people found at least one error in their credit report. 1
Employers and landlords may also check credit reports before hiring or renting to you. Importantly, reviewing a credit report can help you spot fraud or possible identity theft.
Next steps
Now that you know how to read a credit report, learn what your credit score is, why it matters, and how to improve it.