by Robin Holland
Think of your credit report as a snapshot of your financial life.
Creditors don't get to know you by inviting you over for a barbecue or “friending” you on Facebook. They look to your credit report to get an idea of who you are, your history of payments with loans and credit cards, and what kind of client you may potentially be. Creditors can tell a lot about you from your credit report. They have a ton of experience in evaluating consumers' creditworthiness and their potential to be a credit risk based on the information revealed in it.
Let's take a look at the different kinds of information on your credit report.
Your Equifax credit report contains four categories of information.
Credit Report: Identifying information
This nuts-and-bolts section of your credit report isn't used for scoring purposes — it establishes who you are. The information usually comes from lenders who report to Equifax that you applied for or have credit with them.
This section establishes who you are and should list your name, address, Social Security number, and date of birth, and it may include employment information. It's all there so that credit grantors and lenders know that the accounts belong to you and not to the guy across town who may share your name.
Credit Report: Trade lines
These are your credit accounts. Lenders report on accounts you have established with them. The information includes the type of account (bank card, auto loan, mortgage, etc.), the date you opened the account, your credit limit or loan amount, the account balance, and your payment history including any late payments.
Credit Report: Inquiry information
This section contains information about companies that have requested and/or viewed your credit report information, typically within the last two years. This could be a “soft inquiry” from a credit card company looking to extend a preapproval offer of credit to you, or a "hard inquiry" from credit grantors with who you have applied for credit. (Check out next week's post on opting out of credit preapproval offers.)
Credit Report: Public record and/or collection information
Your credit report may contain public record information, such as judgments, tax liens, and bankruptcies. It may also contain account information from professional service providers, such as doctors, hospitals, and cable companies that has been turned over to an outside collection agency. Not all credit reports contain public record and/or collection information. Generally speaking, negative information drops off your credit file after seven years.
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