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Consumer Assistance Topics

Credit Reports

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Last Updated: August 1, 2023
Credit Reports

A credit report is a detailed record of how you've managed your credit over time. Credit reports are used most often by lenders to determine whether to provide you with credit and how much you will pay for it. Credit reports are also used by insurance companies, employers, and landlords.

This guide will help you understand the information that is included in your credit report, how credit reports are used, and how to maintain a strong credit report.

Credit Report Basics

Your credit report includes details about your credit history, including the number of credit accounts you have open, as well as closed accounts; your history of on-time and delinquent payments; accounts that are in collections; the number of times you have applied for credit; and more. This history goes back years and the information on your report can remain there for years. 

Financial institutions – including credit card lenders, mortgage lenders, auto lenders, and more -- often use this information to determine whether or not to provide you with credit and how much you will pay for it. Insurance companies, employers, and landlords can also request to access your credit report.

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Credit History and Score

The information in your credit report and other information in your credit history are used to calculate a credit score.  And your credit score is one of the key factors in getting approved for a loan.  The better your credit history (i.e., making on-time payments, keeping your credit balances in check, etc.), the higher your credit score. And a high credit score means you may be more likely to be approved for a loan and be offered better loan terms. For these reasons, it is important to understand the five major components that make up your credit score. While not every credit reporting agency has the same component breakdown, it is helpful to look at the breakdown for the FICO score with which most people are familiar:

  • Payment History – Reported payments account for 35 percent of your total credit score. Late payments will affect your score negatively, so it is important to consistently make payments on time.
  • Credit Utilization – How much of your credit is in use makes up 30 percent of your score. If you reach the credit limit on your credit cards, it lowers your credit score. Do your best to pay down credit card balances and keep them low.
  • Length of Credit History – How long you have been using credit and making payments, as well as the amount of time each of your credit accounts have been open, accounts for 15 percent of your total credit score. If you are trying to raise your credit score, closing accounts may not necessarily be the best move. Every person’s situation is different, but it might be better to pay off your accounts and keep them open to maintain long-standing accounts.
  • New Credit – New credit accounts make up 10 percent of your credit score. Opening too many new accounts in a relatively short period of time could hurt your score.
  • Credit Mix – The remaining 10 percent of your score is based on the variety of credit accounts you have. Having a mix of revolving credit accounts (e.g., credit cards) and installment loans (e.g., auto loans and student loans) with positive payment histories shows that you can manage different types of credit and will increase your score.

Remember, the higher your credit score, the lower the risk to a potential lender, and the better terms for you.

Your credit score may be included in your credit report.  If not, you can obtain your credit score for a fee from a number of outlets, most of them accessible online. Some services offer a subscription to obtain updated scores regularly.  This can be costly. In some cases you can obtain your credit score from a lender, if that lender has used your credit score to help set material terms (such as the interest rate) on your loan or credit card.  In most of these cases, the lender must inform you of the score and related information free of charge.

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Consumer Protections on Credit Reports

The Fair Credit Reporting Act (FCRA) is a federal law that promotes the accuracy, fairness, and privacy of information maintained by credit bureaus. Consumer protections under the FCRA include:

  • Anyone who uses a credit report or another type of consumer report to deny your application for credit, insurance, or employment – or to take another adverse action against you – must tell you, and must give you the name, address, and phone number of the agency that provided the information.
  • You may request and obtain all the information about you maintained by a credit bureau. You are entitled to a free file disclosure:
    • Once every 12 months;
    • If a person or business has taken adverse action against you because of information in your credit report;
    • If you are the victim of identity theft and place a fraud alert in your file;
    • If your file contains inaccurate information as a result of fraud;
    • If you are on public assistance; or
    • If you are unemployed but expect to apply for employment within 60 days.
  • You may request a credit score from credit bureaus that create scores or distribute scores used in residential real property loans, but you will have to pay for it. In some mortgage transactions, you will receive credit score information for free from the mortgage lender.
  • If you identify information in your file that is incomplete or inaccurate and report it to a credit bureau, it must investigate unless your dispute is frivolous. See for an explanation of dispute procedures.
  • Inaccurate, incomplete or unverifiable information must be removed or corrected, usually within 30 days. However, a credit bureau may continue to report information it has verified as accurate.
  • In most cases, a credit bureau may not report negative information that is more than seven years old or bankruptcies that are more than 10 years old.
  • A credit bureau may not give out information about you to your employer, or a potential employer, without your written consent.

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Tips for a Positive Credit Report

  • Pay your loans and other bills on time. Even if you fell into trouble in the past, you can rebuild your credit history by beginning to make payments as agreed. Paying your debts on time will have a positive effect on your credit score and can improve your access to credit.
  • To help show that you have not borrowed too much, try to minimize how much you owe in relation to your credit limit. Don't automatically close credit card accounts that have been paid in full and haven't been used recently because that may lower your available credit. However, you may want to close a card with a zero balance if you pay a monthly fee for the card.
  • If you believe you cannot repay your creditors, contact them immediately and explain your situation. Ask about renegotiating the terms of your loan, including the amount you repay. Reputable credit counseling organizations also can help you develop a personalized plan to solve your money problems, but less-reputable providers offer questionable or expensive services or make unsubstantiated claims.

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Additional Resources

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