Your credit report is the history of how you have used credit, including credit cards, student loans, or car loans. Everyone in the United States who uses credit has a report like this.
The information is gathered by the three national credit reporting agencies: Equifax, TransUnion, and Experian. What their reports show can have a major impact on your life, either positive or negative. That's because any potential creditors can look at the reports. So can landlords, insurance companies, and potential and current employers (if you give your permission).
WHAT THE REPORT SHOWSYour report reveals how promptly you pay your loans and credit card bills, how many loans and credit cards you have, what your credit limits are, and the total amount you owe on each loan or card.
The report also includes information in the public record, like tax problems, legal judgments against you, bankruptcy, and, in some states, child support obligations. Finally, it reflects how much credit you've applied for. Applying too often can work against you.
But the report is strictly about credit. It doesn't include your race, gender, religion, medical records, national origin, political preference, criminal record, your salary, or how much you have in your bank accounts.
INSTITUTIONAL LOANSYour college or university may have an Institutional Loan Program. If loan officers contact a credit reporting agency to determine whether you are eligible to borrow, that's sometimes called a "hard hit" or a "hard inquiry." Hard hits are included on your credit report. If you have several hard hits, this could have a negative effect on your credit score.
But if there's a "soft hit," as there would be if you checked your own score, the college or university inquiry does not affect your credit score. Check with your Student Finance department about whether your school offers these loans and how they use your credit history.
GETTING A COPY OF YOUR REPORTYou can get a free copy of your credit report each year from each of the three credit reporting agencies. And it's smart to know what those reports say, especially if you're applying for a loan or credit card, are looking for a job, want to rent an apartment, or need insurance.
Just go to www.annualcreditreport.com and follow the instructions. You can also get a free report any time you're turned down for credit. It shouldn't cost you anything.
Don't be fooled by ads for free credit reports from any place but annualcreditreport.com. The fee may be hidden, but it's there.