The Basics on Credit Reporting

From the big three credit bureaus, TransUnion, Equifax and Experian, to your rights under the Fair Credit Reporting Act, the information below will help you navigate the credit report maze.

The Role of Credit Reporting Agencies

Creditors work directly with credit agencies whenever you open a new credit card. First, the creditor asks the reporting agencies for a copy of your financial history, and a “hard inquiry” is recorded on your credit report. Using your credit reports, credit scores, and income and debt information, the creditor decides what rates to offer. Once you receive your new credit card and begin to use it, the crediting agencies receive information on your credit use every 30 days or so. When lenders and creditors report this information to the agencies, they’ll update your credit profile, and thus your report will continue to change depending on your activity. The next time you apply for a new credit card, the process repeats.

What is Included in Your Credit Report?

There are six parts to your credit report:

  • Consumer information (address, birthday and employment)
  • Consumer statement (if applicable; it’s a short statement explaining a credit dispute that went unresolved)
  • Account histories
  • Public records
  • Inquiries
  • Creditor contacts

The information on your credit report changes when you initiate a new account, miss a payment, or change your address. Negative records remain on your credit report for 7-10 years, while positive records can stay on longer.

How Can I Correct My Credit Report if It’s Wrong?

Since not all creditor report to TransUnion, Equifax and Experian, each credit report could vary greatly; thus, we recommend checking all three credit reports every 6-12 months to ensure your reports’ accuracy. Thanks to the Fair Credit Reporting Act, every twelve months you’re entitled to a free copy of your credit report. You can request one from each credit reporting agency at

If you notice any inaccuracies when reviewing your credit report, you can dispute the information with the credit reporting agencies or the creditor.

Improving Credit Report Scores

Remember that a good credit report leads to better credit rates. Work to keep credit card balances lower than 35% of their limits, stick to a consistent bill paying schedule, and check up on your credit reports so that you can catch and dispute any mistakes.

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