Since your credit score is based on information in your credit report, it is important to know what your report contains. Your name, address, social security number, date of birth and employment will be listed on your report to identify you and are not used in determining your credit score. Your report also includes:
1) Trade Lines – These are your credit accounts, which include loans, mortgages, credit cards, and other credit accounts you’ve opened. Your report lists the type of account you have, when you opened it, its credit limit, the account balance, and the details of your payment history.
2) Requests for your credit – These are also known as credit “inquiries.” There are two kinds: hard inquiries and soft inquiries. When you apply for credit, you are giving authorization to the lender to view your credit history. Your report will list everyone who viewed your credit report in the last two years. This is known as a “hard inquiry” or “voluntary inquiry” and can affect your credit score. On the other hand, “soft inquiries” or “involuntary inquiries” are ones that you didn’t initiate. This includes when you check your own credit reports and scores or companies that request your report to make you a preapproved credit offer. Soft inquiries don’t have an impact on your credit score.
3) Public records and collections – These can include collection accounts, bankruptcies, tax liens, foreclosures, lawsuits, and judgments. These public records are taken from state and county courthouses, as well as collection agencies.
There are time limits on how long certain information should show on your credit report. Although positive information can stay indefinitely, negative information including late payments, foreclosures, and collection actions, must be removed after seven years. Bankruptcies can be reported for ten years. Inquiries should be removed in two years. To ensure a more accurate credit score, make sure you review your credit report and see if all the reported information is correct.
All this data is collected and stored by credit bureaus, which are private, for-profit companies. The three largest credit bureaus in the U.S. are Equifax, Experian, and TransUnion, and they sell information about you to lenders. Since not all lenders report information to all the bureaus, if you were to get copies of your credit reports from the three bureaus on the same day, you’ll probably notice a few differences among them. For example, the balances showing up on an account might differ from bureau to bureau. Therefore, because your score is based on information that is in your credit report, your score will also be different depending on the bureau you use. You can get a free copy of your credit report annually from each of the three largest bureaus at a single site: www.annualcreditreport.com
To check your FICO credit score, visit MyFico.com