Credit Reports

Your Financial Reputation

A credit report is a detailed record of your borrowing and repayment history. Think of it as a report card for how you handle money. Just as your school grades follow you from year to year, your credit report follows you throughout your adult life.

Three major companies — called credit bureaus — collect and maintain credit reports: Equifax, Experian, and TransUnion. Lenders, landlords, and even some employers check your credit report to decide whether they want to do business with you.

What Is on a Credit Report?

Your credit report includes:

• Personal information: Name, address, Social Security number, date of birth
• Credit accounts: Every credit card, loan, and mortgage you have ever had — when it was opened, the credit limit or loan amount, and your payment history
• Payment history: Whether you paid on time, were late, or missed payments entirely
• Public records: Bankruptcies, tax liens, or court judgments related to debt
• Inquiries: A record of who has looked at your credit report (lenders checking before approving a loan, for example)

Your Credit Score

Your credit report is used to calculate your credit score — a three-digit number (usually between 300 and 850) that summarizes your creditworthiness. The higher the score, the more trustworthy you appear to lenders.

Credit score ranges:

• 800–850: Exceptional
• 740–799: Very good
• 670–739: Good
• 580–669: Fair
• Below 580: Poor

What affects your credit score:

How Personal Responsibility Affects Your Credit

Your daily financial decisions directly shape your credit report. Here is how responsible behavior helps — and irresponsible behavior hurts:

Builds good credit:

• Paying every bill on time, every month
• Keeping credit card balances low (under 30% of your limit)
• Only applying for credit when you truly need it
• Keeping old accounts open (length of history matters)

Damages your credit:

• Missing payments or paying late
• Maxing out credit cards
• Applying for many credit cards in a short period
• Defaulting on loans (failing to repay)
• Declaring bankruptcy

Why Your Credit Score Matters

Your credit score affects much more than just whether you can get a loan:

• Interest rates: A higher score means lower interest rates on mortgages, car loans, and credit cards. Over the life of a 30-year mortgage, the difference between a good score and a fair score can cost over $50,000.
• Renting an apartment: Most landlords check credit reports. A poor score can mean you are denied housing.
• Employment: Some employers check credit reports (with your permission) as part of the hiring process, especially for jobs involving money.
• Insurance premiums: In many states, your credit score affects your car and homeowner’s insurance rates.
• Cell phone plans: Carriers check credit to decide whether you qualify for a contract plan or need a prepaid plan.

Checking Your Own Credit Report

Federal law entitles everyone to one free credit report per year from each of the three bureaus. You can access them at AnnualCreditReport.com — the only truly free, government-authorized source.