What is a Credit Report?

     Your credit report and what it says about you is the first step to determining what efforts need to be taken to improve your credit!

     What's that you say? What is a Credit Report? Well lets look a that question with some detail.

     It is a file of information about your credit experiences and history. This report generally contains the following information about you:

• Personal Information such as Your Name, Current and Previous Addresses, Phone Number, Social Security Number, Date of Birth and Current and Previous Employers.

• Account Information pertaining to your Creditors including Account Number, Date Opened, Credit Limit or Loan Amount, Balance, Monthly payment and Payment history for several years.

• Public records such as Federal District Bankruptcy Records and State and County Court Records of Tax Liens and Monetary Judgments.

• The names of those who have obtained a copy of your credit report.

• Statements of Dispute.

     This report is available to current and potential creditors as a source of information about your past and present actions in dealing with your creditors. The best why to think of your report is to put yourself back in high school and compare it to the report card you use to take home to your parents. In this case your report card was a measure of your performance over the last grading period and your parents reviewed this report to determine how well you were or were not doing! Often a poor grade prevented you from enjoying your weekend plans for a few months, while a good grade resulted in some sort of reward. Now for the bad news..... You thought you never had to look at a report card again once you graduated! Well that couldn't be further from the truth. Your credit report in all aspects replaces your high school report card but on a much grander scale. You are graded on this report by your current creditors (think of them as teachers). Then the credit companies compile your credit report (think of it as your report card), and then this report is distributed to companies you are trying to establish credit with (think of them as your parents). These companies review your credit report and determine if you've been "bad or good" and either extend you credit or reject your application. Unfortunately, unlike your high school report card, your credit report never takes a summer break and it never starts over at the beginning of the next year. So what does all this mean? It means you have to work hard to establish good credit and keep it!

     Excuse me, what's that you say? You didn't get good grades in high school. Your parents wrath was no big deal and you turned out fine. I know, me too! But this is different, you see our society revolves around money whether we like it or not. We need money to pay for food, water, shelter, transportation, etc.... and unless your are rich and can pay cash for your home or even your car you will need to borrow the money to pay for these necessities. This is where that ever present credit report comes into play. The lender you are asking to borrow money from is going to look at your report and use it to determine the likelihood you will repay them the money your borrowed plus interest (their profit)! If your credit report says you are frequently late paying your present creditors, the lender will assume you will probable pay them late too, or worse maybe you won't pay them at all. Granted this is only an assumption and you may have every intention of paying the lender on time in full but, its your word against your own historic actions. In this case the lender will probable deduce you are a high risk and will not loan you the money.

     So let me ask you a question! Do you know what your credit report says about you? NO YOU SAY!!! That's not good. Imagine going to your parents at 16 years old and asking them to loan you $2000 to buy a car on the day your report card arrived. Only you have no idea if your report card shows all "A's" or all "F's"! I can't speak for your parents but mine would have said no if my grades were all "F's". If I had the "A's" we might of had something to talk about! The point I am trying to make is you need to know what your credit report says in order to improve it.....

     OK, here's the scope on how this works. There are three major credit bureaus that lenders use to "pull" your credit. These companies are:

• Experian (Formerly TRW)
• TransUnion
• Equifax

     Each of these companies maintains a separate credit report on you based off information gathered from your creditors. Depending on who your lenders are and which Credit Bureau's they report to, if not all three, will determine the differences in your credit report from each company. At a bare minimum you need to order a report from one of these companies directly or through an intermediary. The best thing you could do is order a Tri-Merge report. This report is one that merges the information from all three Bureau's into one report so you can see the information that all three credit providers are reporting about you.

     For a single credit report, I highly recommend FreeCreditProfile because they will give you your TransUnion report and credit score as well as 30 days of their credit monitoring service all for free. Read the details and order your report at the following link:

     For a Tri-Merge report, I recommend TrueCredit.com. They call their Tri-Merge report a 3 in 1 but it's the same thing. Tri-Merge reports are very valuable and as a result not offered for free but I really like this particular 3 in 1 because of how easy it is to read. After you've seen a few credit reports you'll come to appreciate one that is simple to understand. You can order this report here:

Online 3-in-1 Credit Report Links

     Opps, one more thing, did I not explain was a credit score is? Well in short, it's a number that summarizes the information in your credit report. A low number relates to a report with negative information and a high number corresponds to a report with positive information. This number is very important and drives many decisions made buy creditors. For more detailed information see:

What is a Credit Score?

Know your rights! Learn about the FCRA here.

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