9 little-known credit report facts

Category: Credit

 

A lot of things significantly depend on what your credit report says—decisions about housing, loans, and sometimes even jobs. A credit report includes information about credit accounts and loan history, but these are some credit report facts that many people are surprised to learn:

Paid accounts might not appear on your credit report

While completely paying off your credit cards in full is a great thing to do, your lender might not be reporting that you pay off your balance every month. It’s really just about timing, and it can be hard to pinpoint. If your credit card history is reported immediately after you just paid it off, then there’s a good chance that it will show up. However, if it’s reported before you pay it off and while you’re still carrying a balance, that is likely what will appear on your credit report.

Not everything you see is correct

Information that is displayed on your credit report isn’t always correct. In fact, many credit reports contain mistakes and these errors can be bringing your score down. This is why it’s so crucial to monitor your credit report on a routine basis, and look through all the information carefully. If anything seems wrong, you can take action to get it removed from your credit report.

You have different credit scores

A lender will see three different FICO scores from the main credit reporting bureaus when they run your credit. While some lenders will average out all three scores when determining what your credit rating is and when making their decision, others will only focus on your lowest score. As such, if one of your FICO scores is great, but the other two aren’t quite as good, you may have difficulties getting approved for credit with certain lenders.

You also have different credit reports

In addition to having three different FICO scores, consumers also have three credit reports that aren’t exactly the same. The differences can be minor, but sometimes they can be significant. Because each credit bureau processes credit activity in their own way, and because creditors are not required to report your activity to all three agencies, the information on each report can be very different. Make sure you look at all three of your credit reports on a routine basis.

There are multiple credit reporting bureaus

Experian, TransUnion, and Equifax are the three main agencies that most people recognize when it comes to credit reporting. But according to the Consumer Financial Protection Bureau, there are other credit reporting bureaus out there, which also collect similar credit information.

Public records may appear on your credit report

Did you forget to pay for that overdue library book or that parking ticket? It may just show up on your credit report. A lot of these types of debts are public records, and as such, can appear on your credit report and negatively affect your credit score.

You may be entitled to additional free credit reports

Although everyone is entitled to receive a free credit report once a year, some people may be eligible to receive additional credit reports at no cost. For example, if you believe that your insurance premiums have significantly gone up or that you weren’t offered a job because of credit reasons, you usually have the prerogative to receive a copy of your credit report from that party, and for free. Also, if you are unemployed, you may qualify to receive an additional annual credit report for free.

Your credit score isn’t affected when you pull your credit report

When a lender pulls your credit report after you apply for credit, a hard inquiry is made and your score is negatively affected. However, when you pull your credit report on your own and without applying for anything, your score is not affected.

Your score usually isn’t included with your free credit report

Although you can receive an annual free credit report, you’ll have to pay a fee in order to see what your three different credit scores. There are workarounds, however. Some credit cards will offer free credit scores to their customers along with their monthly statement, and Credit Karma allows users to view their TransUnion score at no cost.

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Nothing above is meant to provide financial, legal or tax advice. You should meet with appropriate professionals for such services.

Tags: credit reports, credit scores

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