Jul
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How Does Information Get on Your Credit Report?

July 19, 2014

creditEver wondered how all that credit information winds up in your credit report? The credit experts at the Equifax Finance blog explain it all in the recent article, “

How Do Credit Reporting Agencies Get Their Information?

Credit reports are used by lenders to assess your risk as a borrower and includes information about your credit account, such as the account type, date opened, credit limit or loan amount, account balance, and payment history. Credit reports will also show if any accounts are in collections.

The

information in your credit report comes directly from the companies that have extended you credit in the past or from those with which you have open accounts, such as credit card companies, banks, credit unions, retailers, auto lenders and even your Chicago real estate mortgage lenders. Those companies send all the details of your credit activity to the credit reporting agencies (CRAs). CRAs also receive information from debt collectors and public records, which include any bankruptcies, tax liens and judgments.

To determine your credit score, CRAs look at several factors, with payment history being the most important. Creditors let the CRAs know whether or not you pay your bills on time; if you pay them on time, it reflects positively on your credit score. However, if you fall behind on payments, it can negatively impact your score.

As you open new types of credit, information gets sent to the CRAs, creating a history of your credit activity, so your credit score is constantly changing. A new credit score is calculated each time there is a request for a score, and requests themselves impact the calculation. If you were to pull your credit report from each of the three major CRAs, you would likely find slightly different information in each. This is due to the fact that not all creditors report to all three agencies. On top of that, each CRA has its own model for calculating credit scores.

You should regularly monitor your credit report to make sure that the information in it is accurate and up to date, as an error could impact how you are perceived by lenders.

Get more information on what to look for in your credit report in the full article on the Equifax Finance blog, and while you’re there, check out the many other helpful articles on a wide range of personal finance topics, from credit to retirement to insurance to identity theft protection.

 

 

 

 

About The Author

Amanda Winters

Read All Stories By Amanda Winters

Amanda Winters joined the mRELEVANCE team in 2007 as an account manager focusing on real estate clients. With extensive experience in the homebuilding industry, having served as the communications representative at a nonprofit that builds housing for the homeless, she is a perfect fit for the team.

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