Understanding Your Credit Report: What to Review

Summary

• Your credit report records your history of borrowing and repaying money, and lenders may use it when reviewing a credit application.
• The report includes identifying information, account details, payment history, balances, public records and credit inquiries.
• Soft inquiries do not affect your credit score, while hard inquiries can.
• You can review reports from Equifax, Experian and TransUnion through AnnualCreditReport.com and address errors or suspicious activity.

Your credit report can tell you a lot about how you have used credit over time. Understanding what it contains can help you spot mistakes, recognize activity you do not know about and prepare for future borrowing decisions.

The three major credit bureaus - Equifax, Experian and TransUnion - collect information used to create credit reports. That information also helps determine credit scores, including your FICO® Score. A credit report is the detailed record; a credit score is a number based on information in that record.

What Information Appears on Your Credit Report?

Although reports may differ, the main sections usually cover the following information:

• Personal information: Your name, current and previous addresses, Social Security number and, in some cases, employment history.
• Payment history: Whether payments on reported credit accounts were made on time, late or not at all.
• Credit accounts: The kinds of credit you use, including revolving credit such as credit cards and installment loans such as auto loans and mortgages.
• Balances and credit limits: How much you owe and, for revolving accounts, how much available credit you are using. This relationship is often called credit utilization.
• Public records: Certain financial records, such as bankruptcies, when applicable.
• Credit inquiries: Records of businesses that have requested access to your credit information.

Reviewing each section can help you distinguish information that accurately reflects your credit history from details that need a closer look.

What Is the Difference Between Hard and Soft Credit Inquiries?

A credit inquiry happens when someone checks your credit information. The reason for the review determines whether it is classified as a hard or soft inquiry.

Soft Inquiries

A soft inquiry may occur when a company reviews your credit for a prescreened offer or checks an existing account. Checking your own credit report is also a soft inquiry. Soft inquiries do not affect your credit score and generally are visible only to you, not to lenders reviewing your report.

Hard Inquiries

A hard inquiry commonly occurs when you apply for new credit and a lender checks your report to evaluate the application. Hard inquiries can affect your credit score and may be visible to other lenders.

Before submitting an application, consider which personal borrowing options fit your needs. When you review your report later, look for hard inquiries connected to applications you recognize.

How to Check Your Credit Reports

AnnualCreditReport.com is the official site for requesting free credit reports from the three major credit bureaus. Free online reports are currently available weekly from each bureau.

To make your review useful, follow these steps:

1. Request your reports. Look at information from all three credit bureaus, since the details they receive may not be identical.
2. Confirm your personal information. Check that names, addresses and other identifying details are accurate.
3. Review reported accounts and payments. Compare balances, limits and payment status with your records.
4. Check credit inquiries. Make sure you recognize applications associated with hard inquiries.
5. Set a routine. Review your credit reports at least annually and more often if you want to monitor changes or resolve a concern.

What Should You Do If You Find an Error?

Pay particular attention to late payments you believe were reported incorrectly, balances that do not match your records, accounts that are not yours and hard inquiries you did not authorize.

For inaccurate information, contact the credit bureau showing the error and the company that supplied the information to request a correction. Keep a record of what you reported and any supporting information you provide.

If an unfamiliar account or inquiry suggests identity theft, consider placing a credit freeze with the credit bureaus and report suspected identity theft at IdentityTheft.gov. Maintaining good cybersecurity habits can also help you protect sensitive information as you monitor your financial accounts.

Not every concern signals fraud. Your report may also help you identify areas to review, such as high balances, substantial use of available credit or debt carrying high interest. These are opportunities to assess your financial picture rather than reasons to make a rushed decision.

Make Credit Report Reviews Part of Your Routine

You do not need to be applying for a loan to benefit from checking your credit report. A regular review can help you understand your borrowing history, address inaccuracies and make decisions with better information.

Frequently Asked Questions

Does Checking Your Own Credit Report Hurt Your Credit Score?

No. Requesting and reviewing your own report is a soft inquiry, which does not affect your credit score.

How Often Can You Get a Free Credit Report?

You can currently request free online reports weekly from each of the three nationwide credit bureaus through AnnualCreditReport.com. Even if you do not check that frequently, reviewing all three reports at least once a year is a useful routine.