A credit report is a historical account of an individual's credit history, or payment patterns, for credit cards, mortgages, and other loans. Credit reports also include personal information such as the name, home address, birth date, and Social Security Number of individuals. Credit scores may be provided as part of a credit report.
Lenders will often modify the terms and conditions of a loan based on the credit information found in credit reports. In addition to the above information, these reports also include data such as previous addresses, employment history, as well as public records such as bankruptcies, tax liens, or judgments against individuals.
The information appearing in a credit report is compiled from a variety of sources, including credit card companies, mortgage lenders, local banks and other financial institutions. The information exchanged includes applications for new credit as well as repayment of existing loans.
Prior to seeking a new loan for an automobile or home, it is advisable to make sure credit reports are accurate. The three major consumer credit reporting agencies are:
Each reporting agency has developed a proprietary credit score, which is used to measure the relative credit risk of individuals. The components of this score includes payment history, outstanding debt, length of credit, diversity of debt held, as well as recent applications for new credit.