Credit Report

What You May Not Have Known About Your Credit Report

The information in your credit report can have a serious impact on your life. It can help you get credit, prevent you from getting a job and affect insurance rates. Understanding your credit report is an important step in controlling your finances and safeguarding yourself against identity theft.

Your Rights

You are entitled to one free report every year from each agency. Request all three at one time, or stagger the requests through the year. You are also entitled to a free report if you are turned down for credit for any reason.

  • To get your free credit report, visit and submit your request through the website.
  • If you are refused credit, send a letter to the reporting agency to request a report. Include the name of the creditor who denied your application and the date you were notified.

Who Pulls Credit Reports?

Credit reports are currently being used by employers, landlords, and insurance companies. A bad credit report can prevent you from being offered a job, and it can cause your insurance premiums to rise. Even if you aren’t planning on applying for a new mortgage, loan or credit card, the information on your report can still affect your life.

The FICO Score

This powerful number is the first thing lenders review, but the agencies aren’t required to give it to you. While the agencies are required to send you a free report, they are not required to provide you with this important number. You can pay a small fee to find out what it is, but knowing the number will not help you prevent or catch identity fraud.

Personal Information

Your credit report will list your current and previous employers and addresses. Review this information carefully. While some typographical errors are not a concern, the appearance of an address you’ve never lived at should be.

Public Records

Public records like bankruptcies, judgments, and liens will appear on your credit. Even after judgments and liens are satisfied and paid in full, they will continue to show on the credit for years to come. Any errors in public records should be addressed immediately to improve your credit score.

Collection Accounts

Even a collection account that is paid in full will be viewed poorly by potential creditors, so try to avoid having any bills get this far. Make payment arrangements with companies you owe money to, and make sure that you uphold your end of the arrangements. When reviewing your credit, look closely at this section to be sure any accounts listed there are legitimate.

Merchant Trade Lines

This section lists every account you have had in the last seven to 10 years. This includes credit cards, mortgages, auto loans, and personal loans. It shows how much credit you have been issued, how much you have used, what you currently owe, and if there have been any late payments. Creditors love seeing a balance that is fewer than 50% of the available credit, as that shows restraint and good self-control.

Review this section very closely. If you have accounts that are open but have not been used in several years, you should consider having them closed. Look for accounts that you did not open, and immediately take steps to have them marked as fraudulent. Check payment histories to ensure that they are accurate.


This section will usually appear larger than it should. Even if you only request one line of credit in a six-month period, your report may still show 10 or more inquiries. This is because companies you currently have credit with can pull your report to see if you are on time with all your accounts. Being late on any one account can cause interest rates on other accounts to suddenly rise, so make sure you stay current with all payments.

Every inquiry on the report should either be one that you requested or made by a company you currently have a credit relationship with. Inquiries that do not fall into either category should be investigated.

It’s vital that you pull your credit report every year to ensure that your information is correct and you are not the victim of identity theft. You don’t have to get the FICO score to know if your credit is looking healthy, you can make that determination largely by looking at your public records, collection accounts, and debt-to-credit ratios. Review the report carefully for signs of fraud, and promptly address any information that is incorrect.