Your credit report affects your credit score—do you know what's in it?
Plus, how to check yours for free
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A credit report captures the details of your financial history, and tells a story of how you’ve managed borrowed money in the past. Creditors, landlords, employers, and others can use the information in your credit report to help them make decisions about your financial future.
“Anything important that you do—getting a job, a place to live, a car, an education, insurance coverage—often involves someone viewing your credit report,” says Melinda Opperman, president and chief relationship officer at Credit.org, a nonprofit financial counseling agency.
Take a few minutes to understand what exactly a credit report is, and how to check yours for free.
What information is included in a credit report?
There are four main parts to a credit report:
Your identifying information including your name, Social Security number, date of birth, current and previous addresses, and employment history. This information won’t be used to measure your creditworthiness.
Your credit accounts including the type of account—for example, a student loan or credit card—when you opened it, the credit limit, and your payment history. Credit-scoring companies use this information to calculate your credit scores.
Credit inquiries, which come in two forms. Hard inquiries occur when you officially apply for credit. Soft inquiries occur when you check your own credit, or a business pulls your credit as part of a pre-approval process.
Public record information such as bankruptcies, foreclosure filings, lawsuit judgements, and tax liens.
You’ll notice one thing missing from your credit reports: credit scores. You may be wondering what’s the difference between a credit report and a credit score.
Although closely intertwined, these are packaged separately and are not the same thing. A credit report is a record of your financial history. Credit-scoring companies, such as FICO and VantageScore, use the details in your credit reports to calculate your credit scores. That three-digit number measures how well you’ve borrowed money—and the likelihood you’ll repay it in the future.
In short, the information in your credit reports can influence your credit scores (but not vice versa). You can pay the credit bureaus a small fee to check your scores, or use other methods to monitor your credit scores for free.
So, how does your information get on these credit reports in the first place?
When you borrow money or use a credit card, your lenders and card issuers report your account information and payment history to consumer-reporting agencies. There are dozens of consumer-reporting companies across the U.S., but many people have heard of the big three: Equifax, Experian, and TransUnion. These agencies collect and store your account information. When someone wants to check your credit, the credit bureau provides it in the form of a credit report.
Who can look at your credit reports?
Credit bureaus won’t give your credit reports to just anyone. Thanks to the Fair Credit Reporting Act (FCRA), anyone who asks to see your credit reports must have a legitimate business reason. Those entities may include:
Lenders and credit card issuers
Anyone with a court order
Keep this info tightly guarded. “Credit reports contain a lot of sensitive information,” Opperman says. “If yours falls into the wrong hands, they’ll have everything they need to commit identity theft successfully.”
How do you get a free credit report?
At AnnualCreditReport.com, you’re entitled to a free copy of your Equifax, Experian, and TransUnion credit reports once a week through April 2021. Before the COVID-19 pandemic, federal law limited free access to once per year from each credit bureau.
You may also be able to get a free credit report and free credit score from other sources:
A credit card issuer, such as Bank of America, Chase, or Capital One
Your bank or credit union
A free credit-monitoring service, such as Credit Karma or Credit Sesame
How often should you review credit reports—and why?
It’s a good idea to regularly check your credit reports to make sure the information is accurate and there are no signs of identity theft. A good rule of thumb: Monitor your credit reports every few months, when you suspect identity theft, and before applying for credit.
As many as one in four credit reports contain some kind of error that can affect one of your credit scores, according to a study by the Federal Trade Commission. Some of those errors are serious enough to result in less favorable loan terms.
Here’s what to look for:
Verify your identification information. Even small details, like a wrong address, could mean incorrect account information is associated with your credit file.
Review your account information to make sure it’s accurate. That includes the date you opened the account (and closed it, if applicable), payment history, and balance information.
Make sure negative information that's outdated is removed. Late payments, collection accounts, and foreclosures can remain on your credit reports for seven years. A Chapter 7 bankruptcy can be reported for as long as 10 years. Once the appropriate time frame has passed, the credit bureaus must remove these items.
Look for red flags. If you notice accounts you didn’t open or a balance that’s too high, you may be a victim of identity theft. Check your credit card transactions for fraudulent purchases, and consider getting a free security freeze on your file.
“All of this is to underscore how important it is that consumers check their own credit reports,” Opperman says. “Sometimes you’re the only person who will know if a particular piece of information is inaccurate.”