What is a Credit Report

A Credit 'Report' & 'Profile' are often used synonymously

A credit report is a bunch of information that different people, places, and companies have reported to one of the three credit bureaus about you. The three credit bureaus are TransUnion, Experian, and Equifax. Each of the credit bureaus house a separate report for every person with a social security number in the US that is over 18 years of age. While they report the same basic information, many companies choose to report to only one or two of the bureaus rather than all three.  On the other hand, some companies who use credit reports as a way to learn more about their customers, might only look at certain bureaus reports, for example, your auto insurance rate is affected by the information that has been reported to Equifax, and has nothing to do with TransUnion or Experian. There is nothing that requires the three bureaus to reflect the same information, so while you may have similar or even identical reports from the three bureaus, you may also have a dramatically different profile with each company.

How is a credit report used?

The main purpose of a credit report is to generate a credit score. A credit score is a number that is calculated using data on your credit report. The credit score was invented by a company called FICO to help banks avoid lending money to risky borrowers, but now a credit score is generated in a lot of different ways and is used for a lot of different people. For example, if you want to get a mortgage, they will still use a credit score but it might be a Vantage score, while if you want to get insurance you might see a score called Attract.

How do you read a credit report?

Now that we know what a credit report is, lets talk about how to read one. This can be tricky because while they all have the same basic information, credit reports are presented in hundreds of ways. The bureaus each provide reports directly but they also sell reports to companies that can show you reports as well. For example, if you look at Credit Karma, or a credit report pulled by a car dealer, you will see they are all arranged in a different way. Because there are so many different ways to present the information in a credit report, it's important to understand what the basic sections of a credit report are. For the most part there are four categories in every credit report: identifying information, credit accounts, credit inquiries, and public records.